1. Money

Lease Inclusion Amount

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Definition:

The amount of money that is added back into income when you use a leased vehicle in your business. To do this, you do not add an amount to income. Instead, you reduce your deduction for your lease payment. The purpose is to equalize the tax effect between depreciating an owned vehicle and writing off a lease.

You figure the lease inclusion amount using IRS tables contained in Publication 463.

Examples:
This may not have a huge tax effect. Looking at the IRS instructions, they post an example of car leased for three years, having a fair market value of $32,250 that is used 75% for business. The lease inclusion amount for year one is $63.

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