Sixth Circuit - Lessee purchasing leased property can deduct portion of purchase price to buy unexpired lease 

June 13: The U.S. Court of Appeals for the Sixth Circuit today issued a decision holding that a lessee—who buys the leased property from the lessor for a price greater than the value of the property—can immediately deduct as a business expense the portion of the purchase price paid to buy the unexpired lease. The Sixth Circuit, in affirming a federal district court’s judgment for the taxpayer, concluded that the taxpayer is not required to capitalize the entire purchase price. ABC Beverage Corp. v. United States, No. 13-1701 (6th Cir. June 13, 2014)

Read the 13-page Sixth Circuit decision [PDF 88 KB]


Read a June 2014 report [PDF 69 KB] prepared by KPMG LLP.




©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Share this

Share this

Subscribe

Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.


Email your contact information.

Other TaxNewsFlash publications

TaxNewsFlash-United States by year