Leasing Laptop

[Petee_C]

I have rental home income that I can write- off. I was wondering if there were third party companies that would lease a laptop x 36months, with a low or zero dollar residual?

Current laptop is 5yrs old, and showing it's age.... I'm thinking about a fancy i7, SSD/HDD, 17" laptop as a desktop replacement. Yeah, I need that to make my Turbotax, and excel expense sheets go faster... yep!

I can write off leasing costs 100%, or 'buy' computer equipment and right off 30% per year.

In the past, I have just purchased the laptop on the line of credit, and paid it off over 18-24 months.... The books might be easier to lease vs loan....

P

[willw]

Broad as it is long. 30% declining depreciation as opposed to 36 month lease.
We are not talking about thousands here. We are talking what $400-500 at the most over 36 months?

Small busniess is more about saving money not expensing more off over a longer period of time. A 36 month lease will probably cost you 10%/apr at least for that small amount of money.

I leased one several years ago. They wanted twice the street value at lease end for the buyout value. A $1,500 laptop was going to cost me over $2,500 over the 3 year lease including buyout. (yes that was when they were very expensive). This was done through Microage maybe 12 years ago.

I'll never lease again. I even buy my vehicles now adays. Depreciation gets you more write off up front where it loses most of it's value.

But you have to make that business decision on your own. Also talk to your accountant for what's beast for you.

Good Luck
Bill

[Petee_C]

Thx Bill for the reply.

I looked into it further. I guess computers are now Class 50, which gets you 55% depreciation. plus 1/2 year rule.

I guess I missed the Class 52 from last year.... sigh.

The laptop I was looking at is $1399plust HST = $1582

Year / Value / Depreciation (55%)
1 / $1582 / $435 - 1st year half rule
2 / $1147 / $631
3 / $516 / $283
4 / $232 / $128

I'll just finance it on my LOC over 18 months.....

P

[fischer]

Computers are now class 55 which are amortized at 50%. In the long run you'll save more if you have the cash to buy the laptop outright.

http://www.cra-arc.gc.ca/tx/bsnss/tp...g.html#class50

[jshel101]

Originally Posted by fischer

Computers are now class 55 which are amortized at 50%.

I don't see a class 55 in the list you provided, only class 50 and class 52. Am I missing something?

Class 50 (55%)

Include in Class 50 with a CCA rate of 55% property acquired after March 18, 2007, that is general-purpose electronic data-processing equipment and systems software for that equipment, including ancillary data-processing equipment, but not including property that is included in Class 29 or Class 52 or that is principally or is used principally as:

electronic process control or monitor equipment;
electronic communications control equipment;
systems software for equipment referred to in 1. or 2.; or
data handling equipment (other than data handling equipment that is ancillary to general-purpose electronic data-processing equipment).

Class 52 (100%)

Include in Class 52 with a CCA rate of 100% (with no half year rule) general-purpose electronic data processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data-processing equipment if acquired after January 27, 2009, and before February 2011, but not including property that is principally or is used principally as:

electronic process control or monitor equipment;
electronic communications control equipment;
systems software for equipment referred to in 1. or 2.; or
data handling equipment (other than equipment that is ancillary to general-purpose electronic data-processing equipment).

[fischer]

Sorry I meant class 50, as you can see from your post.

[gzink]

Leasing would make sense in very few cases(none I know of) Vehicles or computers. I wish someone could provide an example of where it makes sense.
Bad credit rating/lack of capital I guess might be reason enough.

[JamesK]

For companies, leasing is an expense vs worrying about capital, depreciation and disposal. Many company lease new computers for 3 or 4 years. The leasing company comes in and replaces all the old ones, taking care of all the details, including removing the old computers. They also handle maintenance & repairs etc. So, a company is then just paying for a service, instead of buying and handling all the other details.

I have leased one of my cars. It was an 89 Sable, that I was able to lease through my employer's leasing company. Because I got the corporate rate, I was able to get that car for far less than by any other method. I bought it at the end of the lease and drove it for almost 14 years.