Troy entered into a three-year lease of a luxury automobile on January 1, 2012, for use 80%

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Troy entered into a three-year lease of a luxury automobile on January 1, 2012, for use 80% in business and 20% for personal use. The FMV of the automobile at the inception of the lease was $40,500, and Troy made 12 monthly lease payments of $600 in 2012 and 2013.
a. What amount of lease payments are deductible in 2012 and 2013?
b. What portion, if any, of the "inclusion amount" must reduce Troy's lease deduction in 2012 and 2013?
c. How would your answers to Parts a and b change if the FMV of the auto was $15,000 and the monthly lease payments are $200?
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Federal Taxation 2014 Comprehensive

ISBN: 9780133438598

27th Edition

Authors: Timothy J. Rupert, Thomas R. Pope, Kenneth E. Anderson

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