- quote -

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

- quote -

But neither would she have a car resulting in no income.

704set

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"James Lewis" <jmpj[at]verizon.net> wrote:

- quote -

Leased cars have to adjust their auto lease deduction by
the lease inclusion table amount

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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James Lewis wrote:

- quote -

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

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James Lewis wrote:

- quote -

You need to read http://www.irs.gov/taxtopics/tc510.html
If the lease started on Jan 01, 2006, she has $20,000 plus
gas and expenses as a starting point. Say the total is
$24000. If she documents 75% for business, that's $18,000.

Even then, the amount deductible through the 2106 is only
what exceeds 2% of her AGI, which I hope is high if she's
spending that much on a car. So assuming $100,000 AGI,
about $16,000 flows on to schedule A.

Had she left this money in the IRA, and it compounded at
10%/yr, she'd have had $1.5 million dollars, with no further
deposits. Of course, it would likely 'only' be worth $750K
after inflation. What a shame.

JOE

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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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