Troy entered into a three-year lease of an automobile on January 1, 2023, for use 80% in
Question:
Troy entered into a three-year lease of an automobile on January 1, 2023, for use 80% in business and 20% for personal use. The FMV of the automobile at the inception of the lease was \($79,000,\) and Troy made 12 monthly lease payments of \($1,165\) in each year of the lease.
a. Before considering the effects of any lease inclusions amounts, what amount of lease payments are deductible for 2023, 2024, and 2025?
b. What portion, if any, of the “inclusion amount” must reduce Troy’s lease deduction for 2023, 2024, and 2025?
c. How would your answers to Parts a and b change if the FMV of the auto was \($48,000\) and the monthly lease payments are \($785\)?
Step by Step Answer:
Pearsons Federal Taxation 2024 Individuals
ISBN: 9780138238100
37th Edition
Authors: Mitchell Franklin, Luke E. Richardson