When businesses choose to lease their assets, they often must decide whether to structure the lease as a capital lease or operational lease.

In most cases, businesses prefer operational lease arrangements because they can keep the asset on their books. Structuring an operational lease, however, can be difficult.

To do so, businesses must ensure the lease arrangement meets a number of requirements. For instance, the lease life cannot be longer than 75 percent of the useful life.

If your business has questions about how to structure a lease arrangement, contact the Iowa business transactions lawyers of Lamarck & Landry, P.C., at 877-327-2600.

Many companies structure their transactions to pay maximize their after-tax cash flows. However, tax avoidance strategies often have some restrictions.

For instance, to avoid some taxes, the transaction must occur as an arms-length transaction. These transactions usually take place in the open market place, in which both parties negotiate to a competitive market price.

Transactions that do not meet the arms-length transactions requirement include transactions between related parties. In such transactions, the two parties have some relationship that allows one party to negotiate a sale that would not occur in the marketplace.

The IRS will typically investigate related-party transactions to determine if they were structured in such a way that unfairly gives one party a tax advantage.

If your company has questions about tax-related transactions, contact the Des Moines business transactions lawyers of LaMarca & Landry, P.C., at 877-327-2600.

For many businesses, their biggest costs are related to their office space. Determining how to structure this cost, however, is not always simple.

For some companies, it may be in their best interest to buy their office outright. If they do this, they can expense the building as an asset over the useful life of the asset. 

For other companies, they may prefer to rent the building and expense it according to their lease agreements. The decision, however, may not always be controlled by the company. In some cases, they are required to expense the asset as an operating or capital lease. 

If your building has questions about the legal consequences of a large asset purchase, contact the Iowa business lawyers of LaMarca & Landry, P.C., at 877-327-2600.