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Enter the lease inclusion amount for a vehicle

Per Publication 463, Travel, Entertainment, Gift, and Car Expenses, if you lease a car that you use in your business for a lease term of 30 days or more, you may have to include an inclusion amount in your income for each tax year you lease the car. To do this, you don't add an amount to income. Instead you reduce your deduction for your lease payment. This reduction has an effect similar to the limit on the depreciation deduction you would have on the car if you owned it.)
You can generally use the actual cost method of computing your vehicle expenses. Then, you can deduct each lease payment as a rental expense. However, when business use of a leased vehicle is less than 100%, the rental deduction is scaled down in proportion to the personal use.
Follow these steps to enter information for leased vehicles.
  1. Select the
    Asset
     tab in the activity folder.
  2. Select
    Add
     to add a new asset or change an existing one.
  3. Enter the
    Description
     and
    Date in service
    .
  4. Go to the
    Vehicle/Listed
     tab and select the property type from the
    Type of property
     dropdown.
  5. Select
    Form 4562 Vehicle Questions
    , answer the questions, then select
    OK
    .
  6. Select
    Actual costs
     and enter any expenses at 100%.
  7. Select
    Lease Inclusion
     to enter information for UltraTax CS to calculate the lease inclusion amount. This option is only available for the following types of property:
    Luxury auto (Passenger)
    ,
    Van or light truck
    , and
    Electric vehicle
    . If you don't select 1 of these options in the
    Type of property
     dropdown, then you'll need to calculate manually the lease inclusion amount and adjust it for the business use percentage.
  8. Enter any lease payments in the
    Vehicle Rentals
     field.
  9. Select
    Done
    .
    note
    UltraTax CS automatically generates an Auto Worksheet for each activity, except Form 2106 because Form 2106 already includes the auto information. This worksheet gives an audit trail for the vehicles entered. The worksheet is located in Forms View in the Auto folder.

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