Question

Leasing land provides a tax advantage to the lessee in that lease payments are tax deductible, while there is no deduction for amortization for a landowner.

a. true
b. false

Answer 1

Leasing land provides a tax advantage to the lessee in that lease payments are tax deductible, while there is no deduction for amortization for a landowner.

Step-by-step explanation:

Leasing land provides a tax advantage to the lessee because lease payments are tax deductible, while there is no deduction for amortization for a landowner.

When a lessee leases land, they are typically allowed to deduct the lease payments as a business expense on their tax return. This deduction can help to reduce their taxable income and lower the amount of taxes they owe.

However, as a landowner, there is no deduction for amortization. Amortization is the gradual reduction of an intangible asset's value over time. In the case of land, it is considered a non-depreciable asset, meaning its value does not decrease over time for tax purposes. As a result, landowners cannot deduct any amortization expenses on their tax return.