Which of the Following Statements Is False

question 46

Multiple Choice

Which of the following statements is false?

• A) For a lease to be attractive to both the lessee and the lessor, the gains must come from some underlying economic benefits that the leasing arrangement provides.
• B) With a true tax lease, the lessor replaces depreciation and interest tax deductions with a deduction for the lease payments.
• C) Generally speaking, if the asset's tax depreciation deductions are more rapid than its lease payments, a true tax lease is advantageous if the lessor is in a higher tax bracket than the lessee.
• D) A tax gain occurs if the lease shifts the more valuable deductions to the party with the higher tax rate.

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Definitions:

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