Document Type


Publication Date



flexible-cash, lease agreements

Extension Number

ExEx 5067




Any lease is basically an agreement that gives the use of an asset to a lessee for a specific period of time at a specified rate. A lease does not transfer title of ownership nor an equity interest in the asset. Labeling a document as a lease does not necessarily mean it is a lease according to the Internal Revenue Service (IRS). This document does not address any of the questions concerning the IRS treatment of a lease; if you have such questions, contact your tax management professional. Nor does this document address any questions concerning the legalities of the lease that should be addressed by professional legal counsel. A flexible-cash lease agreement is a rental arrangement in which the landowner receives a predetermined cash fee from the tenant adjusted for changes in prices and/or yields. The tenant produces crops on the land and makes general management decisions as if the land were owned by the tenant.