J.K. Lasser's Small Business Taxes 2018

CHAPTER 12Rents

1. Deducting Rent Payments in General
2. The Cost of Acquiring, Modifying, or Canceling a Lease
3. Improvements You Make to Leased Property
4. Rental of a Portion of Your Home for Business
5. Leasing a Car
6. Leveraged Leases

Alert

At the time this book was completed, Congress was considering important tax changes that could affect 2017 tax returns and planning for 2018. Check the online Supplement in February 2018 at www.jklasser.com or www.barbaraweltman.com to see what changes have been enacted and when they are effective.

Renting or leasing realty or equipment gives you the use of the property without owning it. From a financial standpoint, it might make more sense to rent than to buy property and equipment because renting may require a smaller cash outlay than buying. Also, the business may not as yet have established sufficient credit to make large purchases but can still gain the use of the property or equipment through renting. If you pay rent to use office space, a store, or other property for your business, or you pay to lease business equipment, you generally can deduct your outlays.

Sale-leasebacks are discussed in Chapter 6.

Deducting Rent Payments in General

If you pay to use property for business that you do not own, the payments are rent. Leases may take various forms. For example, with a net lease, the tenant pays for the use of the space as well as costs associated with operating the property, such as taxes, property insurance, utilities, sewer ...