Capital Strategy Brief

The $1 buyout lease, at a glance

The structure should follow the asset, not the other way around.

Scroll to see where it fits
Start With the Asset

The harder question is when to use it

Most firm leaders know how a $1 buyout works: fixed payments, and the asset is yours once the last one clears. The harder question is when to use it. Decide that before you compare a single payment.

Keep-and-own

A $1 buyout fits

Assets the firm will use for years and has no reason to hand back: furniture, build-outs, and software you will run for the long haul.

Refresh-and-return

Often the wrong fit

Assets that lose value or fall behind fast, where staying current beats owning. Fast-cycling technology is the classic case.

Where it earns its place

  • Spreads cost across the asset's useful life,keeping cash and credit lines free for the practice.
  • Automatic ownership at term end,with no fair market value to negotiate and no valuation surprise.
  • Finances the whole project,hardware plus soft costs like installation, configuration, and services.

What to watch out for

  • Owning obsolescence:put fast-cycling tech on a $1 buyout and you own the disposal too.
  • A higher payment than a fair market value leaseon the same asset, since you finance the full cost.
  • Software placed on fair market value termscan mean paying twice for what you already used.
The Ownership Advantage

Because a $1 buyout is treated as a purchase, the firm is the owner for tax purposes. It depreciates the asset rather than expensing rent, which often opens Section 179 or bonus depreciation: a large first-year deduction while payments still spread across the term.

Tax and accounting treatment is transaction-specific and depends on current law and your firm's circumstances. CoreTech does not provide tax or accounting advice. Please confirm with your own advisors.

A Simple Test Before You Sign

Three questions to answer before the paperwork

QUESTION 01

Will we still want this asset when it is paid off?

QUESTION 02

Does the term match the asset's useful life?

QUESTION 03

Have we seen the full cost in writing, with no end-of-term surprises?

Not sure the structure fits the asset?

Our Lease Cost Analyzer is a no-cost, human review of your current terms that surfaces hidden fees, gotcha-clauses, and how your software is really handled, held to CoreTech's gold standard of transparency.

Run a Lease Cost Analyzer review
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CoreTech Leasing, Inc. Capital strategy, equipment leasing, and financing for AmLaw 200 and comparable firms.