Tech Talk
What is a "Fair Market Value" lease?
A lease in which the lessee expenses the entire lease payment and cannot capitalize the asset for tax purposes. No early purchase option is stated. Fair Market Value is only quoted at the end of the lease at lease maturity. Note it is very hard for one to assess today what a piece of equipment will be worth in two, three, or five years from now. What must be taken into consideration is: is this still a marketable piece of equipment? Has technology replaced it? If it was sold in the after market what would it's value be?
