What is tax advantage of Capital lease?

http://wiki.answers.com/Q/What_is_tax_advantage_of_Capital_lease (9/3/2008)

A capital lease ($1 buy out lease) allows the lessor to take advantage of the accelerated depreciation methods, and/or the bonus first-year expensing method (e.g. section 179 deduction) for the leased asset. The lessor also gets to deduct the interest portion of the lease payments, which is greatest at the beginning of the lease. Theoretically, the aggregate deductions over the life of the lease should be equal. Thus, the lessor gets the benefit of accelerated deductibility, and therefore the desirable time value of money.

A capital lease allows the lessor to take advantage of the accelerated depreciation methods, and/or the bonus first-year expensing method (e.g. section 179 deduction) for the leased asset. The lessor also gets to deduct the interest portion of the lease payments, which is greatest at the beginning of the lease. Theoretically, the aggregate deductions over the life of the lease should be equal. Thus, the lessor gets the benefit of accelerated deductibility, and therefore the desirable time value of money.

Always consult your tax accountant before making assumptions about the tax impact of any financial transaction.