On January l Grace leases and places into service an automobile with a FMV of $50,000.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?

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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