Asked by
Lailani Idusora
on Nov 07, 2024
Verified
The CRA will disallow any lease that:
A) Has a lease term in excess of three years.
B) Has a term that is less than one-half of the economic life of the asset.
C) Involves a lessee that has net operating losses.
D) Appears to exist solely to avoid taxes.
E) Reduces the combined tax obligations of the lessor and the lessee.
Tax Obligations
The legal requirement for individuals or entities to pay taxes to governmental authorities according to the laws in place.
Economic Life
Refers to the length of time an asset is expected to be usable for its intended purpose or until it is more cost-effective to replace it.
- Recognize the regulatory framework and intentions behind leasing arrangements.
Verified Answer
JG
Learning Objectives
- Recognize the regulatory framework and intentions behind leasing arrangements.