2. Leases and taxes 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. To be able to deduct lease payments, IRS guidelines must be followed. An agreement that meets all IRS requirements to qualify as a genuine lease is called Elle is a lawyer at Leaseonic Corp. She is evaluating the company's current lease agreements. Elle recently hired an intern, Michael, and assigned him the task of listing the provisions for tax guidelines related to lease contracts. Elle needs to check and find mistakes in the provisions that Michael listed. of the following points outlined in Michael's document, which are correct? Check all that apply. Equipment with a 20-year life cannot be leased for more than 16 years. The lessee has the option of buying the equipment at the expiration of the lease contract at its fair market value. The equipment's residual value at the expiration of the lease should be at least one fifth of its value at the start of the lease. The lessee or any other party has the right to purchase the equipment at the expiration at a predetermined fixed price specified in the lease contract. The lease agreement can restrict the use of the equipment so that only its lessee or a related party can use the asset after the expiration of the term. If a lease purchase option conveys an improvident bargain upon the lessee, the lessee may be subject to upon the sale of the asset