Trish entered into a 36-month lease of an automobile on January 1. She uses it 90 percent for business use and 10 percent for personal use. The fair market value of the automobile at the inception of the lease is $50,000. She made 12 monthly lease payments of $650 during the year.
a. What is Trish's deduction for the lease payments made during the year?
b. What is the lease inclusion amount that Trish must include in her gross income this year?
c. How would your answer to (b) change if the fair market value of the automobile was only $15,000?