Taxpayer is ad sales woman for local radio station and uses car 75% for business. She leases a mercedes worth $80k paying $40k in 06 for a two year lease after which she can buy mercedes for $40k or walk away. How much of the $40k lease payment is deductible on 2106 in 2006?....in 2007? Mike
ps-she's 28 and took a $60k distribution from her IRA to help pay the $40k...brilliant, right:-)
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You need to read
Now why do I smell the AMT kicking in?
Seriously though, one year's lease payment at a time I think. ChEAr$$$$, Harlan Lunsford, EA n LA
Leased cars have to adjust their auto lease deduction by the lease inclusion table amount
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-----> real address on hobokeni or hobokenx
But neither would she have a car resulting in no income.
704set
I never heard of a circumstance where the choice is between a $20k/yr luxury car or no car at all. I suppose if she bought a $25K car and paid it over time, she'd never make a sale? The OP even hinted he didn't think this was the best move she could have made. I cringe when I hear/read any sentence that starts "she cashed out her IRA", but at least sometimes the result is a lifesaving operation for a loved one, not a car lease.
JOE
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