Taxes: new liberal rules for leased business cars
Article Abstract:
New IRS rules offer tax advantages regarding the leasing of business cars. The lessee may claim a deduction for the entire cost of the lease of a car for business purposes, but the lessee is required to add back to income an annual 'income inclusion amount'. The Tax Reform Act of 1986 resulted in new income inclusion amount tables being prepared by the IRS for cars leased after 1986. The tables contain lower annual income inclusion amounts, resulting in tax savings for taxpayers. The penalty for taxpayers using their leased cars less than 50% for business purposes has also been eliminated. The IRS wants to eliminate the abuse of business cars being used for personal purposes, and to eliminate the tax advantages of purchasing luxury cars with the intent of getting back part of the extra cost by claiming business car deductions against income.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1988
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Interest expense allocations
Article Abstract:
The Tax Reform Act of 1986 distinguishes five different types of interest for tax purposes: deductible trade or business tax; investment interest deductible to maximum of net investment income; generally deductible trade or business tax in which the taxpayer does not actively participate; deductible personal interest; and generally deductible home mortgage interest on two homes.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1987
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