What tax issues should paula consider relative to the


Question - Paula is planning to either purchase or lease a $50,000 automobile.

She anticipates that business use of the auto will be 60% for the first two years but will decline to 40% in years three through five.

Currently, Paula's marginal tax rate is 15% but she anticipates that her marginal tax rate will be 35% after a few years.

What tax issues should Paula consider relative to the decision to purchase or lease the automobile? Explain.

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