Title: Leasehold Definition
Headings: Leasehold
Leasehold
What Is a Leasehold?
Key Takeaways
Understanding Leaseholds
Types of Leaseholds
Tenancy for Years
Periodic Tenancy
Tenancy at Sufferance
Tenancy at Will
Leasehold Improvements
Example of a Leasehold
Leasehold Interest
Leasehold FAQs
What Is a Leasehold Estate?
How Do You Depreciate Leasehold Improvements?
Which Type of Leasehold Has a Definite Beginning and Ending Date?
The Bottom Line
Article Sources

Content: The asset is typically property such as a building or space in a building. The lessee contracts with the lessor for the right to use the property in exchange for a series of scheduled payments over the term of the lease. Renting space in an office building for a company's use or renting a building to be used for a retail store are two examples of a commercial leasehold arrangement. Key Takeaways
A leasehold is an accounting term that refers to an asset or property that a lessee (tenant) contracts to rent from a lessor (property owner) for an agreed-upon time in exchange for scheduled payments. Owners of retail stores often use leasehold arrangements for their businesses rather than constructing their own buildings. The leasehold contract for commercial properties can be complex agreements that stipulate such things as the payment structure, breach of contract clauses, and leasehold improvement clauses. The contract will stipulate which party is responsible for making leasehold improvements, which might include such things as building walls and partitions, adding lighting fixtures, or constructing shelves. The IRS does not allow leasehold improvements to be deducted. However, the improvements are subject to depreciation. Understanding Leaseholds
A leasehold contract will stipulate the terms of the agreement between the lessee (tenant) and the lessor (property owner or landlord).