Dennis Harding is considering acquiring a new automobile that he will use 100% for business. The purchase

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Dennis Harding is considering acquiring a new automobile that he will use 100% for business. The purchase price of the automobile would be $64,500. If Dennis leased the car for five years, the lease payments would be $875 per month. Dennis will acquire the car on January 1, 2021. Assume that the inclusion dollar amounts from the IRS table for the next five years are $63, $140, $208, $251, and $289. 

Dennis wants to know the effect on his adjusted gross income of purchasing versus leasing the car for the next five years. He does not claim any available additional first-year depreciation. Write a letter to Dennis summarizing your calculations. Then prepare a memo for the tax files containing your analysis. Dennis’s address is 150 Avenue I, Memphis, TN 38112.

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South-Western Federal Taxation 2022 Individual Income Taxes

ISBN: 9780357519073

45th Edition

Authors: James C. Young, Annette Nellen, William A. Raabe, Mark Persellin, William H. Hoffman

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