The law says....regardless of how it is termed..... If the agreement is for a situation where the substance is ownership, then the leased item has to be handled as if the item was purchased, and the agreement is merely a financing arrangement. The lease payments are handled as note payments, including expensing a portion as interest. It typically depends on the buyout PLUS the nature of the item leased. I would bet large dollars that a building whose depreciable life would be 20+ years and whose lease period is 5 years could NOT be handled as a true lease. Obviously miracles happen, but not often. And, typically an owned situation produces faster writeoff in ag setting..