A fully taxable recapture exists if the lease provides the lessee with an option to purchase the asset at a bargain price.

Name: A fully taxable recapture exists if the lease provides the lessee with an option to purchase the asset at a bargain price.
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If the lease includes a bargain purchase option, it is considered a financing arrangement and results in a fully taxable recapture of all prior depreciation deductions taken by the lessor.

A Fully Taxable Recapture Exists If the Lease Provides the Lessee