What Does the IRS Require If Lease Payments Are to Be

question 44

Multiple Choice

What does the IRS require if lease payments are to be tax deductible?

• A) The lease term must be less than the life of the asset.
• B) The lease payments must be less than comparable loan payments if the asset were purchased.
• C) The initial present value of the lease payments must be less than 90 percent of the asset cost.
• D) The lessee should have the option to purchase the asset at a discounted price at the end of the lease term.
• E) The lease must be primarily for business purposes.

---

Definitions:

Brand-Name Markets

Markets dominated by products or services that are widely recognized and trusted by consumers due to their brand.

Restaurant Market Efficiency

Refers to the degree to which restaurant markets allocate resources optimally, balancing supply and demand effectively to meet consumer preferences.

Advertising

A form of marketing communication used to promote or sell a product, service, or idea through various media channels.

Efficiency of Markets

The degree to which market prices fully reflect all available information and execute trades at minimal costs.