Rules Finalized on Safe Harbor for Leasing Income From Aircraft, Vessels

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IRS unveils final rules (T.D. 9525) on a new Subpart F safe harbor for leasing income from aircraft or vessels engaged in international commerce in cases where the active leasing expenses are not less than 10 percent of the profit on the lease. In the final rules, IRS clarifies that the so-called marketing safe harbor can apply to both operating leases and finance leases. The safe harbor was originally created by the American Jobs Creation Act of 2004. In addition, the agency says the rules clarify that an aircraft or vessel is considered to be leased in foreign commerce if it is used in foreign commerce, and is used predominantly outside the United States.