On January l Grace leases and places into service an automobile with a FMV of $39,000.The business use of the automobile is 60%.The "inclusion amount" for the initial year of the lease from the IRS tables is $20.The annual lease payments are $8,000.What are the tax consequences of this lease?
A)deduction for lease payments of $4,782
B)deduction for lease payments of $4,800
C)deduction for lease payments of $6,000
D)deduction for lease payment of $8,982

Question

Quizplus · Accepted Answer

The correct answer is A. The deduction for lease payments is $4,782. This is calculated as follows:Lease payments x Business use percentage x Inclusion amount = Deduction for lease payments$8,000 x 60% x $20 = $4,782

On January L Grace Leases and Places into Service an Automobile