A Lease Will Be Treated as a Nontax Lease If

question 16

Multiple Choice

A lease will be treated as a nontax lease if it satisfies any of the following conditions EXCEPT:

• A) The property may be acquired at the fair market value of the asset at the time when the option may be exercised.
• B) Some portion of the lease payments is specifically designated as interest or its equivalent.
• C) The lessee receives ownership of the asset on completion of all lease payments.
• D) The total amount that the lessee is required to pay for a relatively short period of use constitutes an inordinately large proportion of the total value of the asset.

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Definitions:

Italy

A European country located in the heart of the Mediterranean Sea, known for its rich history, art, culture, cuisine, and contributions to science and literature.

Edmund Blunden

Edmund Blunden was an English poet, author, and critic, best known for his poetry that detailed his experiences in World War I and the English countryside.

World War I

A global conflict mainly involving European powers that lasted from 1914 to 1918, also known as the Great War, marked by trench warfare and the extensive use of chemical weapons.

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