USA Lease options for S-Corp owner/employee

[Tundraguy]

I have a client who is asking me about if there would be perks in him buying (on a note) a new piece of equipment and leasing it to the S -corp.

The only perk I can see to this is it creates a business deduction for the business, but he would still need to report the income generated by the newly created business deduction? So it kind of seems like a wash.

Anyone have any examples they'd like to share where this is beneficial, and how?

Thank you!

 

[kirby]

Depending on the lease terms, either client or client's s-corp will be owner for tax depreciation. Make sure you arrange terms so depreciation goes to the right party