Structure and Taxation of Commercial Leases

Summary

This practice note explains the structure and taxation of commercial leases and discusses the tax implications of lease transactions for landlords and tenants. Expenses related to operating and maintaining the leased premises may raise questions as to which party is responsible and which tax benefits are available. Often, costs incurred in preparing, entering, completing, or finishing the term of a lease can be placed on either party and will influence the tax status of both parties.