______ would be evidence the lease is being used to avoid taxes and not a legitimate business purpose.
A)Early balloon payments
B)Late balloon payments
C)Capitalizing a lease
D)Transfer of lease payments to a second owner
E)None of the above

Question

Quizplus · Accepted Answer

Early balloon payments are a sign that the lease is being used to avoid taxes. This is because early balloon payments allow the lessee to deduct a large amount of interest expense in the early years of the lease, which reduces the lessee's taxable income.

______ Would Be Evidence the Lease Is Being Used to Avoid