Aviation Aircraft Lease Law and Legal Definition

Leasing equipment doesn’t require as much cash and can stretch your capital budget. One way to acquire aircraft for your budgeted expenses is to use a lease. The rental payments are usually treated as an operating expense.

Those considering aircraft ownership should consider the current tax benefits of leasing. Complicated tax measures called preference tax, such as the Alternative Minimum Tax (AMT) have increased the costs of asset ownership for many companies. Certain tax deductions (such as depreciation) are classified as tax preference items. Lease payments, on the other hand, are not tax preference items and are fully deductible. Simply put, leasing can reduce preference items and reduce your income taxes.