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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

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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) altows the lessee to deduct the lease payments and the lessor can deduct interest payments on any debt used to finance the asset leased. Alease 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 Anusha is a lawyer at Leaseonic Corp. She is evaluating the company's current lease agreements. Anusha recently hired an intern, Michael, and assigned him the task of listing the provisions for tax guidelines related to lease contracts. Anutha 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. The leased equipment should not be a "imited use" property, which means that the equipment should be available for use by anyone at the end of the lease The IRS puts restrictions on lease terms so that the lease transaction can allow companies to increase rapid payments that are tax deductible Equipment with a 20-year life cannot be leased for more than 15 years. 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 residual value of an equipment after expiration of the lease should be at least 20% without adjusting for inflation Under the Income Tax Act, when a purchase option is exercised, the amount deemed to have been claimed by the lessee as CCA is based on the following: the option purchase price plus all lease payments paid under the agreement the difference between the purchase price and CRAS deemed cost the for market value of the asset at the time of purchase

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