Please help with calculating Lease payment deduction for 2021? Please show calculation. Thank you

On March 1, 2021. Barbi entered into a three-year lease of an automobile used exclusively in her business. The automobile's FMV was 560,500 at the inception of the lease. Barbi made ten monthly lease payments of $700 each during 2021 (Click the icon to view the Lease Inclusion Dollar Amounts for Automobiles with a Lease Beginning Calendar Year 2020) Is Barbi able to avoid the luxury automobile restrictions on depreciation by leasing instead of purchasing the automobile? Explain (Use 365 days for computations. Do not round intermediary calculations Round your answer to the nearest whole dollar) O A. Yes. By leasing the automobile instead of purchasing, Barbi is able to avoid the luxury automobile restrictions on depreciation. Since the automobile was not purchased at the beginning of the year. Barbi may deduct half of the automobile lease payments made during the year OB. Yes. By leasing the automobile instead of purchasing, Barbi is able to avoid the luxury automobile restrictions on depreciation Barbi may deduct all of the automobile lease payments made during the year OC. No Barbi may deduct the automobile lease payments made during the year. However, she must reduce the deduction by a "lease inclusion amount" found in the given table published by the IRS This reduction prevents Barbi from avoiding the luxury auto depreciation limits that apply to purchased vehicles. OD. No. Since the automobile was not purchased at the beginning of the year, Barbi may deduct half of the automobile lease payments made during the year. However she must reduce the deduction by a "lease inclusion amount" found in the given table published by the IRS. This reduction prevents Barbi from avoiding the luxury auto depreciation limits that apply to purchased vehicles Barbi's lease payment deduction for 2021 is Lease Inclusion Dollar Amounts for Vehicles With a Lease Term Beginning in Calendar Year 2020 REV. PROC. 2019-26 TABLE 4 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2020 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th and Later 0 1 0 2 2 13 2 6 9 10 11 17 20 24 7 17 24 35 30 39 22 46 32 41 27 48 57 32 49 58 68 38 79 56 64 68 77 44 90 49 72 87 100 117 84 102 56 68 99 121 139 78 116 139 161 89 159 131 148 163 1183 205 99 110 121 177 227 197 215 179 249 131 3 = = = = = = 8 8 8 8 8 8 8 8 8 8 = 8 8 8 s 6 6 195 235 $50,000 51,000 52,000 53,000 54,000 55,000 56,000 57,000 58,000 59,000 60,000 62,000 64,000 66,000 68,000 70,000 72,000 74,000 76,000 78,000 80,000 85,000 90,000 95,000 100,000 110,000 120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 230,000 240,000 271 $51.000 52,000 53.000 54.000 55.000 56.000 57.000 58.000 59.000 60.000 62.000 64,000 66.000 68,000 70.000 72.000 74.000 76.000 78.000 80,000 85.000 90.000 95.000 100.000 110,000 120.000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200.000 210,000 220,000 230.000 240.000 and over 142 211 293 153 227 254 272 306 353 172 254 315 3513 408 198 225 463 295 334 373 433 513 401 449 252 518 520 600 292 345 615 7110 820 931 399 452 506 559 612 666 592 671 750 830 710 805 901 996 254 279 303 720 327 351 376 773 826 909 988 1.067 1.147 1,227 1,306 1,385 1.464 1,544 1.091 1.186 1,281 1.377 1.471 1,566 1.661 1.757 1.852 1.040 1.150 1.260 1,370 1,480 1.589 1.700 1.810 1.920 2.029 2.139 400 424 880 934 987 1,040 449 473 TAX AUTHORITY UPDATE At the time this edition went to print, the IRS had not yet released the 2021 lease inclusion amounts. For examples and problems in the text we assume the limits will be the same for 2021 as they were in 2020. On March 1, 2021. Barbi entered into a three-year lease of an automobile used exclusively in her business. The automobile's FMV was 560,500 at the inception of the lease. Barbi made ten monthly lease payments of $700 each during 2021 (Click the icon to view the Lease Inclusion Dollar Amounts for Automobiles with a Lease Beginning Calendar Year 2020) Is Barbi able to avoid the luxury automobile restrictions on depreciation by leasing instead of purchasing the automobile? Explain (Use 365 days for computations. Do not round intermediary calculations Round your answer to the nearest whole dollar) O A. Yes. By leasing the automobile instead of purchasing, Barbi is able to avoid the luxury automobile restrictions on depreciation. Since the automobile was not purchased at the beginning of the year. Barbi may deduct half of the automobile lease payments made during the year OB. Yes. By leasing the automobile instead of purchasing, Barbi is able to avoid the luxury automobile restrictions on depreciation Barbi may deduct all of the automobile lease payments made during the year OC. No Barbi may deduct the automobile lease payments made during the year. However, she must reduce the deduction by a "lease inclusion amount" found in the given table published by the IRS This reduction prevents Barbi from avoiding the luxury auto depreciation limits that apply to purchased vehicles. OD. No. Since the automobile was not purchased at the beginning of the year, Barbi may deduct half of the automobile lease payments made during the year. However she must reduce the deduction by a "lease inclusion amount" found in the given table published by the IRS. This reduction prevents Barbi from avoiding the luxury auto depreciation limits that apply to purchased vehicles Barbi's lease payment deduction for 2021 is Lease Inclusion Dollar Amounts for Vehicles With a Lease Term Beginning in Calendar Year 2020 REV. PROC. 2019-26 TABLE 4 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2020 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th and Later 0 1 0 2 2 13 2 6 9 10 11 17 20 24 7 17 24 35 30 39 22 46 32 41 27 48 57 32 49 58 68 38 79 56 64 68 77 44 90 49 72 87 100 117 84 102 56 68 99 121 139 78 116 139 161 89 159 131 148 163 1183 205 99 110 121 177 227 197 215 179 249 131 3 = = = = = = 8 8 8 8 8 8 8 8 8 8 = 8 8 8 s 6 6 195 235 $50,000 51,000 52,000 53,000 54,000 55,000 56,000 57,000 58,000 59,000 60,000 62,000 64,000 66,000 68,000 70,000 72,000 74,000 76,000 78,000 80,000 85,000 90,000 95,000 100,000 110,000 120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 230,000 240,000 271 $51.000 52,000 53.000 54.000 55.000 56.000 57.000 58.000 59.000 60.000 62.000 64,000 66.000 68,000 70.000 72.000 74.000 76.000 78.000 80,000 85.000 90.000 95.000 100.000 110,000 120.000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200.000 210,000 220,000 230.000 240.000 and over 142 211 293 153 227 254 272 306 353 172 254 315 3513 408 198 225 463 295 334 373 433 513 401 449 252 518 520 600 292 345 615 7110 820 931 399 452 506 559 612 666 592 671 750 830 710 805 901 996 254 279 303 720 327 351 376 773 826 909 988 1.067 1.147 1,227 1,306 1,385 1.464 1,544 1.091 1.186 1,281 1.377 1.471 1,566 1.661 1.757 1.852 1.040 1.150 1.260 1,370 1,480 1.589 1.700 1.810 1.920 2.029 2.139 400 424 880 934 987 1,040 449 473 TAX AUTHORITY UPDATE At the time this edition went to print, the IRS had not yet released the 2021 lease inclusion amounts. For examples and problems in the text we assume the limits will be the same for 2021 as they were in 2020