What rights does the lessor retain in a true lease?

What rights does the lessor retain in a true lease?

• A. Rights to asset appreciation
• B. Rights to ownership and tax benefits
• C. Rights to lease renewal terms
• D. Rights to equipment resale

Answer: (B)

In a true lease, the lessor retains key rights traditionally associated with ownership of the asset. This includes rights to ownership and tax benefits that arise from holding the title to the leased asset. Essentially, because a true lease is structured such that the lessee does not gain an ownership interest in the asset, the lessor maintains its ownership rights throughout the lease term. From a financial perspective, the lessor can benefit from any depreciation deductions for tax purposes, as they still own the asset. This ownership also means that the lessor retains the ability to make decisions regarding the asset, including how it’s maintained and managed. In contrast, the other options refer to rights that may not apply in the context of a true lease. For instance, asset appreciation typically pertains to investments where an ownership stake is involved, while lease renewal terms and equipment resale rights would relate more to the negotiating dynamics or end-of-lease options that are not primarily possessed by the lessor in a traditional sense.

In a true lease, the lessor retains key rights traditionally associated with ownership of the asset. This includes rights to ownership and tax benefits that arise from holding the title to the leased asset. Essentially, because a true lease is structured such that the lessee does not gain an ownership interest in the asset, the lessor maintains its ownership rights throughout the lease term.

From a financial perspective, the lessor can benefit from any depreciation deductions for tax purposes, as they still own the asset. This ownership also means that the lessor retains the ability to make decisions regarding the asset, including how it’s maintained and managed.

In contrast, the other options refer to rights that may not apply in the context of a true lease. For instance, asset appreciation typically pertains to investments where an ownership stake is involved, while lease renewal terms and equipment resale rights would relate more to the negotiating dynamics or end-of-lease options that are not primarily possessed by the lessor in a traditional sense.