Lease Purchase? Ask yourself one question....

You might want to research a bit further.

MACRS is all that is available for the most part.

Heavy trucks such as OTR are 3 year property. My professional software comes up with this life.

Other equipment is subject to a 5 year life and some is 7 year property.

 

I have begun seeing many companies going towards to Incorporation versus LLC. Can someone explain??

KH

 

When I had my business structure, leased with Swift, my accountant/tax guy listed as Sole Proprietor....he told me it was the best option for the income level basing this on both Federal and State (CA) tax positions.

I have wondered why Swift, fell out of the...or rather restructured to the LLC and dropped away from the Corporation "umbrella" of Saint Corp.

 

BigJohn or Roadmedic....would you take a shot at my above post and perhaps attempt to get a reason why Swift would change to LLC from their previous Corporation standing?

As you both have a good handle on the ins and outs of the corporate differences!

 

It is my understanding that my lease gives me no equity in the truck until I decide to buy it at the end of the lease. I can in fact buy the truck at any point during the contract as well. I have a schedule of value for purchase if I so choose. At the end of the contract I have three options, purchase the truck, turn it in and lease another truck or walk away. If I purchase the truck I am purchasing a five year old truck with about 650,000 miles for $12,000. At that point I should be able to depreciate the purchase just the same as if I purchased a truck from anyone else.

The problem with a lot of so called lease programs is that they are really traditional financing agreements disguised as a lease to try to beat the tax man, only problem is is that the tax man says you can take a pig, give it a bath, put a bow on it and call it Fluffy, it doesn't make it a French Poodle.

 

My wife thinks we should look at expanding once we own this truck. She would like a business that we could leave to our daughter. I'm wondering if at that point I should look at incorporation. My goal would be to expand large enough to get myself out of the drivers seat. Probably three to four trucks. I haven't decided to go this route, but Warren Buffet said you should invest in what you understand. I understand business.

 

I did a quick look at Swift and I find they are still operating under the corporate shield of Swift Corporation.

I see that they formed the LLC for the operating company and it is highly in debt structures. This is probably the reason they have moved toward this.

I cannot see the ownership of the LLC to confirm, but it appears it is owned to a big portion by the corporate entity.

 

so what your telling me is if I lease a truck from a mega fleet bottom feeder I won't make a lot of money ?!?

*sarcasm intended*

 

I guess from what I have read here and on other post, some people (depending on their lease) are going to be successful no matter if they are incorporated or a sole proprietor and some people no matter what are going to fail. My plan is to try and stay away from any of the starter companies who offer or push leases. If I decide down the road to become an O/O I will worry about it then. Corporations, LLC's and Sole Proprietorships are individual choices. Only your lawyer and CPA can really advise you on what to do.

 

As an enrolled agent to practice before the IRS, I have had many dealings with all types of business structures. The LLC is not the magic protection that people think it is.