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- Short term rental property - Capital Lease vs Operating Lease
Short term rental property - Capital Lease vs Operating Lease
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ptax255
Level 7
yesterday
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Hi, client has a 15 month lease of a property that he rents out on airbnb. At the end of the lease, he will purchase the property. Contract has been signed and money escrowed. I believe because of this, this would be a capital lease, therefore depreciated.
My questions are:
How do I calculate interest expense? Lease payments - depreciation expense?
Would the cost to depreciate be different than the usual purchase price/land value?
Thank you!
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