Important rates, such as incremental borrowing rates, discount rates and money cost, figure into leasing metrics, making it critical to choose the rates carefully to reflect the perspective being considered. This article describes an alternative yield that may help to bridge that gap.
As the captive financial services company for Mercedes-Benz USA and for Daimler Trucks North America, Daimler needs to manage a multitude of tax-code changes and updates across the passenger car industry and the heavy and medium trucking industry throughout the United States, Canada and Mexico.
Daimler Financial was running three separate systems to support the tax implications of passenger car customer loans, customer leases, and a third for truck leases. Because these three IT systems do not have the automatic tax . . . read more
Should the EBO lease go away?
While the date of the first EBO lease is sketchy, the reason for its implementation was clearly designed to allow the lessee to essentially “have their cake and eat it too” by combining the advantages of
(i) the security of a fixed interest rate common to a loan and
(ii) favorable OBS treatment of an operating lease and
(iii) operational flexibility by having the ability to return the asset at lease maturity . . . read more
The 2009 year has been one of many changes and proposed changes, including in the stock market, in the economy, in healthcare and in the U.S. federal tax regime.
On The SILO – LILO Front
Although the Internal Revenue Service previously decided that a settlement initiative was the most effective way to address its opposition to SILO and LILO transactions, it did not extend settlement offers to all parties involved in those transactions. In addition, some parties who extended offers decided . . . read more
On Oct 3, 2008 President Bush signed Public Law 110-343 (hereinafter, the “2008 Energy Act”) and on Feb. 17, 2009 President Obama signed Public Law 111-5 (hereinafter, the “2009 Energy Act”), which create, extend and modify tax incentives to encourage the development of technology to utilize specific renewable energy sources, promote competition between renewable energy sources and conventional energy sources and encourage the efficient use of energy sources. This column summarizes three interrelated provisions in this legislation. Unless otherwise indicated, . . . read more
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