What is a Lease inclusion amount?
A lease inclusion amount is a dollar figure that reduces otherwise allowable Vehicle expenses deductions for leased passenger automobiles with fair market values exceeding IRS thresholds. For 2023, vehicles valued over $60,000 at lease inception require these calculations. The inclusion amount comes from IRS tables based on vehicle value and lease year, then prorates by days used for business and business use percentage. This mechanism equalizes tax treatment between leased and purchased vehicles, subject to depreciation limits, preventing taxpayers from avoiding luxury automobile caps through leasing.
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