The Reason the IRS Is Most Concerned About Lease Contracts

question 18

Multiple Choice

The reason the IRS is most concerned about lease contracts is:

• A) firms that lease generally pay no taxes.
• B) that leasing usually leads to bankruptcy.
• C) that leases can be set up solely to avoid taxes.
• D) because leasing leads to off-balance-sheet-financing.
• E) All of

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Definitions:

Operating Costs

Operating Costs are the expenses associated with the day-to-day functionalities of a business, excluding costs related to production.