|
Read One Members experience...
(After clicking on the Farm Credit Leasing link above, click on
About FCL tab, then
Transportation Services, and then
Vehicle Pricing.)
Farm Credit Leases
Leasing Means Flexibility
Leases can be structured for
virtually any farm vehicle, equipment, machinery and facilities – new or used –
including trucks, tractors, timber and logging equipment, machine sheds,
livestock buildings, grain storage and other farm equipment. Because there is no
required down payment, a lease can reduce your initial cash outlay, freeing up
working capital to be used elsewhere. Lease payments and purchase options are
generally fixed and known in advance, providing cash flow management
opportunities and peace of mind.
Tax Advantages
While lower up-front cash outflow
is definitely a benefit, one of the most-talked about reasons for leasing farm
equipment or structures is the tax advantage. Since payments on true tax leases
are 100 percent tax deductible, a lease is a good option if you need to reduce
your tax liabilities. Because you are able to deduct your lease payments,
leasing in many cases can reduce your tax liability by permitting a faster write
off of expenses than can be achieved through depreciation.
Special Vehicle Leasing Program
We also offer a very attractive
pickup truck and sport utility truck leasing program available to farmers only
through Farm Credit Services. We utilize Farm Credit Leasing’s national fleet
volume discount to provide you with the lowest available acquisition cost for
these types of vehicles. In addition to leasing’s tax benefits, there are other
program advantages – like no mileage or wear and tear charges, and the ability
to custom-order your vehicle just the way you want it.
Section 179
Leasing can be particularly
valuable if you have used all the annual Section 179 deduction for the year – or
for acquisitions in the last quarter of the year – and want to manage the
Internal Revenue Service’s mid-quarter convention restrictions. You should check
with your tax consultant to determine how these provisions may apply to your
operation.
Manufacturer Financing Ending?
If you received a manufacturer’s
special introductory financing on your tractor, combine or other equipment,
contact your local Farm Credit Services financial professional before those
terms expire and higher rates begin. A Farm Credit Services lease may help
extend your savings beyond the introductory period.
Leases For Estate Planning
Leasing also can be a good tool
for estate planning. With a lease, a producer who is looking at retiring in the
near future can pass on a piece of equipment or facility to whoever is taking
over the farm without any implications to the retiree’s estate. At the end of
the lease, the lessee assigns the purchase option to the new farm operator whom,
with the lessor’s approval, can purchase the equipment or facility or return the
item and get something more suitable for his or her needs.
Terms
Farm Credit leases offer longer
repayment periods for your larger capital purchases.
Generally leases are available
for:
·
Up to seven years
for new machinery
·
Up to 10 years for
some buildings and certain farm improvements
Choose from monthly, quarterly,
semi-annual and annual payment schedules.
Farm Credit leases are tailored to
the useful life of the item being financed so you’re not paying for an asset
that is physically depreciated.
|
