Which of the Following Leases Is Not Likely to Be

question 36

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 percent equity

---

Definitions:

Service Charge

A fee collected by a bank, institution, or service provider for the provision of a service, often associated with transactions or account maintenance.

€

The symbol for the Euro, a currency used by many countries in the European Union.

Strengthens

Increases in strength, durability, or intensity of an object, material, or concept.

US$

U.S. dollars (US$) is the currency of the United States of America and is one of the most widely used currencies in the world for both international and domestic transactions.