Which of the Following Leases Is NOT Likely to Be

question 44

Multiple Choice

Which of the following leases is NOT likely to be viewed as a lease from the perspective of the Internal Revenue Service?

• A) A 20-year lease for an asset having an economic life estimated to be 40 years
• B) A lease offering a renewal option based on the asset's remaining value at the time of the renewal
• C) A lease providing for a purchase option at the end of the lease period for a nominal sum
• D) A leveraged lease in which the lessor contributes 40% equity