Got busy and didnt reply earlier, BUT I was going to ask a few things and give an example I know of similar to what you are saying.
Is this the companies idea of trying to utilize employees retirement $ as capital expenditures?
Who owns the equipment if the company goes out of business?
Is the company trying to bolster employees retirement plans more by having them do this? Is their line of thought since they will be charting the equipment irrespective of who owns it, why not pay your employees retirement accts?
The example I was going to use is I know some guys (my grandfathers friends) who own tugs and barges on the river and have done very well company A. In order to pass on $ from the company they created another company with only the grand kids as owners company B. Company B got a big loan from a bank with a written contract to charter so many barges at a certain rate from Company A. Company B then purchased the barges and now exclusively lease to company A.
It passes on the wealth to the grand kids, avoids any gift taxes, whatever else they can think of.
If I were in your situation after reading your other responses I'd probably do it the investment.
This post was edited on 6/11 at 11:00 am