tax consequence of a long term lease

by Mike
(Martinsville, VA)

At how many years of the long term lease with a cell tower entity, is the income to the owner considered a capital gain v/s ordinary income?

In other words what is considered a perpetual lease in the eyes of IRS?

Comments for tax consequence of a long term lease

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Aug 15, 2014
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Long Term Lease
by: Anonymous

Treas Reg 1.0645-4(b)(2) provides a definition as 30 years or more.

Jul 23, 2013
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Excellent question...
by: Sean (Tower Genius)n

Great question, but one better asked of your CPA. We can not provide tax advice in any manner.

To the best of my knowledge no IRS challenge has been made yet in regards to the various claims of cash flow purchase companies regarding the tax implications of such deals. While these firms always talk about your tax options during their sales pitch there is always a little waiver at the bottom of the page that states that they are not providing tax advice .

When the state and federal taxing authorities see enough of these deals I am sure they will establish a policy as we have seen that happen with real estate transfers that were disguised as long term leases to avoid transfer taxes and fee's in some states.

The best thing you can do is ask your CPA for their guidance.


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