ZuoTi.Pro
Question

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.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

QUESTION:-H ess wishes to either purchase A tax client who owns a busin or lease a new Lexus. The cars, 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 ANS: The uses will b the car is 80% used for the business and 20% for personal expenses the uses will be proportioned accordingly and the expenses incurred in relation to business will be deductible. Ifthe person takes the car on lease then the cost of operating the vehicle plus depreciation amount will be deducted. The amount of depreciation to be deducted is more in case of leasing in comparison to purchase. The interest which is paid on the loan taken to purchase the car is not deductible whereas if any loan is taken for leasing than the implicit cost is tax deductible. Thus. I would recommend my client to take the car on e whole deductible if it is to use the car for the business purpose but since lease

0 0
Add a comment
Know the answer?
Add Answer to:
A tax client who owns a business wishes to either purchase or lease a new Lexus....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • You are a business and technology consultant providing consulting services to a new client who owns...

    You are a business and technology consultant providing consulting services to a new client who owns a small business selling tax preparation services over the internet. Your client has given you the following parameters of her business: Serving about 1500 customers annually All work needs to be done over the internet using remote contractors to help during tax season The customers pay for services using credit cards All work is estimated prior to an engagement, then contracts are generated and...

  • ​Lease-versus-purchase decision  Personal Finance Problem   Joanna Browne is considering either leasing or purchasing a new Chrysler...

    ​Lease-versus-purchase decision  Personal Finance Problem   Joanna Browne is considering either leasing or purchasing a new Chrysler Sebring convertible that has a​ manufacturer's suggested retail price​ (MSRP) of $33,500. The dealership offers a 3​-year lease that requires a capital payment of $3,374 ($3,074 down payment​ +$300 security​ deposit) and monthly payments of $495. Purchasing requires a $2,620 down​ payment, sales tax of 6.9% ($2,312​), and 36 monthly payments of $922. Joanna estimates the value of the car will be $17,000 at...

  • After deciding to buy a new car, you can either lease the car or purchase it...

    After deciding to buy a new car, you can either lease the car or purchase it on a 3-year loan. The car you wish to buy costs $43,000. The dealer has a special leasing arrangement where you pay $4,300 today and $505 per month for the next 3 years. If you purchase the car, you will pay it off in monthly payments over the next 3 years at an APR of 6%. You believe you will be able to sell...

  • You decided to buy a new car, and you can either lease the car or purchase...

    You decided to buy a new car, and you can either lease the car or purchase it on a three- year loan. The car you wish to buy costs $32,000. The dealer has a special leasing arrangement where you pay $99 today and $450 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at a 7 percent APR. You believe you will be able...

  • After deciding to get a new car, you can either lease the car or purchase it...

    After deciding to get a new car, you can either lease the car or purchase it with a three-year loan. The car you wish to buy costs $34,500. The dealer has a special leasing arrangement where you pay $1 today and $450 per month for the next three years. If you purchase the car, you will pay it off in monthly payments over the next three years at an 8 percent APR. You believe that you will be able to...

  • Irene is saving for a new car she hopes to purchase either four or six years...

    Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $12,000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent. (For all requirements, do not round intermediate calculations. Round your...

  • Irene is saving for a new car she hopes to purchase either four or six years...

    Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $11,000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent. (For all requirements, do not round intermediate calculations. Round your...

  • rene is saving for a new car she hopes to purchase either four or six years...

    rene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $29,000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she cashes in the investment after either four or six years, she expects the applicable marginal tax rate on long-term capital gains to be 25 percent. (For all requirements, do not round intermediate calculations. Round your...

  • Irene is saving for a new car she hopes to purchase either four or six years...

    Irene is saving for a new car she hopes to purchase either four or six years from now. Irene invests $12.000 in a growth stock that does not pay dividends and expects a 6 percent annual before-tax return (the investment is tax deferred). When she ca investment after either four or six years, she expects the applicable marginal tax rate on long term capital gains shes in the all requirements, do not round intermediate calculations. Round your final answers to...

  • I have a friend who owns a home business of cloth diapers. Currently, she only sells...

    I have a friend who owns a home business of cloth diapers. Currently, she only sells her products locally. She has mentioned about investing more in equipment and expand her business by selling it online also. The equipment needed for her business would cost around $5,000. She is thinking about selling each cloth diaper for $12. The variable cost is $4 per diaper. She expects to sell about 50 diapers a month and about 600 diapers a year. She estimates...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT