Section 50 IAC 5.1-1-6 - "Capital lease" definedAuthority: IC 6-1.1-31-1
Affected: IC 6-1.1-8-2
Sec. 6.
"Capital lease" means a lease that should be capitalized by the lessee for federal income tax purposes and meets one (1) or more of the following requirements:
(1) Ownership of the property is transferred to the lessee at or before the end of the lease term.(2) The lease permits the lessee to purchase the property or renew the lease at a price or rental which is substantially less than the estimated market value or fair rental of the leased property at the time the option to purchase or renew the lease is exercised.(3) The lease term is equal to seventy-five percent (75%) or more of the estimated economic life of the leased property.(4) The present value of the minimum lease payments equals or exceeds ninety percent (90%) of the fair market value of the leased property at the inception of the lease. A capital lease may be a sales-type lease, a direct financing lease, or a leveraged lease.
Department of Local Government Finance; 50 IAC 5.1-1-6; filed Dec 15, 1993, 5:00 p.m.: 17 IR 950; reinstated by IC 6-1.1-8-44, eff Jul 1, 2003