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.