On January l,Grace leases and places into service an automobile with a FMV of $38,000.The business use of the automobile is 60%.The "inclusion amount" for the initial year of the lease from the IRS tables is $40.The annual lease payments are $8,000.What are the tax consequences of this lease?
A)deduction for lease payments of $4,776
B)deduction for lease payments of $4,800
C)deduction for lease payments of $4,760
D)deduction for lease payment of $1,896

Question

Quizplus · Accepted Answer

A)Lease payments of $8,000 × .60 = $4,800 are initially allowed.The inclusion amount is $40 × .60 = $24.$4,800 - $24 = $4,776.

On January L,Grace Leases and Places into Service an Automobile