Renewal of five year lease is it dis allowable?

It depends on the terms of the lease agreement and the laws in the jurisdiction where the lease is taking place. In some cases, a renewal of a five-year lease may be allowed if both parties agree to it and it is in compliance with the terms of the original lease agreement. However, in some jurisdictions, there may be restrictions on the length of lease agreements or requirements for certain types of leases to be in writing. It is important to review the lease agreement and consult with a legal professional to determine if a renewal of a five-year lease is allowable in a specific situation.

Yes, the renewal of a five-year lease is generally not deductible as an expense under Section 178 of the Internal Revenue Code.

Section 178 allows businesses to expense certain qualifying property up to a certain amount. This includes costs associated with the leasehold improvements and lease acquisition costs. However, the renewal of a lease is not considered a "lease acquisition cost" and is therefore not eligible for expensing.

Lease renewal costs are typically capitalized and amortized over the remaining term of the lease. This means that the costs are added to the basis of the leased asset and deducted ratably over the remaining lease term.

Here are some additional considerations:

- If the lease renewal includes significant improvements to the leased property, the costs of those improvements may be eligible for expensing under Section 179.
- Some states may have different rules regarding the deductibility of lease renewal costs.
- It is always advisable to consult with a tax professional to determine the specific tax treatment of lease renewal costs in your particular situation.