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lease transaction, Country-Fed executed the certification
required by section 7701(h)(2)(C).3 In each lease transaction,
3 Sec. 7701(h)(2) provides:
(2) Qualified motor vehicle operating agreement
defined.--For purposes of this subsection--
(A) In general.--The term "qualified
motor vehicle operating agreement" means any
agreement with respect to a motor vehicle
(including a trailer) which meets the
requirements of subparagraphs (B), (C), and
(D) of this paragraph.
(B) Minimum liability of the lessor.--An
agreement meets the requirements of this subparagraph
if under such agreement the sum of--
(i) the amount the lessor is
personally liable to repay, and
(ii) the net fair market value of the
lessor's interest in any property pledged as
security for property subject to the agreement,
equals or exceeds all amounts borrowed to finance
the acquisition of property subject to the
agreement. There shall not be taken into account
under clause (ii) any property pledged which is
property subject to the agreement or property
directly or indirectly financed by indebtedness
secured by property subject to the agreement.
(C) Certification by lessee; notice of tax
ownership.--An agreement meets the requirements of
this subparagraph if such agreement contains a
separate written statement separately signed by
the lessee--
(i) under which the lessee certifies,
under penalty of perjury, that it intends that
more than 50 percent of the use of the property
subject to such agreement is to be in a
trade or business of the lessee, and
(continued...)
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Last modified: May 25, 2011