2. Leases and taxes Aa Aa Leasing is a very lucrative source of financing for ce

Question

2. Leases and taxes Aa Aa Leasing is a very lucrative source of financing for certain companies' needs, including corporations and small- to medium-sized businesses. This is because the Internal Revenue Service (IRS) allows the lessee to deduct the lease payments and the lessor can deduct interest payments on any debt used to finance the asset leased. A lease in which the lessee is the effective owner of the leased property, can depreciate the asset under lease for tax purposes and can deduct only the interest portion of the lease payment is called Rihana is a lawyer at Leaseonic Corp. She is evaluating the company's current lease agreements. Rihana recently hired an intern, Michael, and assigned him the task of listing the provisions for tax guidelines related to lease contracts. Rihana needs to check and find mistakes in the provisions that Michael listed Which of the following points in the document submitted by Michael are correct? Check all that apply.

Explanation / Answer

Is called as capital lease

As far as guidelines are concerned 1 3 & 4 are correct

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