Knowledge Base


Submited by: Jason Gribble

Geneva and Formetco has some great advantages as a team for you.

With the recent changes to Section 179, leasing has never been a better option! At Geneva, we can help you structure your equipment lease to get the best tax advantages for your business. We offer both true tax leases & structures that allow you to take advantage of Section 179.

With a true tax lease, you may have the ability to write-off your monthly lease payments. This type of lease is usually written with a fair market value purchase option, such as FMV 10%. At the end of your lease term, you have the ability to either purchase or return the equipment.


$50,000 worth of equipment
60 month lease with FMV 10% purchase option - $1,000/month
Yearly deductible amount ($1,000/m x 12 m) - $12,000
Annual tax savings (assuming 35% tax bracket) - $4,200

Projected total tax savings over course of 60 month lease term - $21,000


Under section 179, you can expense 100% of the cost of equipment acquired 2014 up to $25,000 ($500,000 in 2013). Depending on your tax bracket, you can save a portion of that equipment cost in tax savings. At the end of the term, equipment must be purchased or the lease renewed to be eligible for this deduction (equipment cannot be returned).

$50,000 worth of equipment
60 month lease with a $1 purchase - $1,080 / month
Amount deducted under section 179 - $25,000
Projected 2014 tax savings (assuming 35% tax bracket) - $8,750

All examples provided heron are illustrative purposes only. Actual numbers will vary. Geneva Capital LLC recommends that each customer consult their individual tax advisor.

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