A tax client who owns a business wishes to either purchase or lease a new Lexus....

A tax client who owns a business wishes to either purchase or lease a new Lexus. The cars's purchase price is $50,000 and she expects to drive the car about 80% for business. Please compare and contrast the tax deductions under the two scenarios and then make a recommendation. Submission Requirements:

Expert Solution

ANSWER:

The utilizations will be entire deductible in the event that it is to utilize the vehicle for the business reason however since the vehicle is 80% utilized for the business and 20%
for individual costs the utilizations will be proportioned as needs be and the costs brought about comparable to business will be deductible.
On the off chance that the individual takes the vehicle on rent, at that point the expense of working the vehicle in addition to deterioration sum will be deducted. The measure of deterioration to be deducted is more if there should be an occurrence of renting in contrast with buy.
The intrigue which is paid on the credit taken to buy the vehicle isn't deductible though if any advance is taken for renting than the understood cost is charge deductible.

CONCLUSION:

Hence, I would prescribe my customer to take the vehicle on rent.

NOTE:

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ekkarill92 answered 1 year ago

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