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On January 1, 2016, Mr. V leased his vacant lot for a period of 12 years to Mr. J at an annual rate of P2,400,000. It was also agreed that Mr. J will pay the following: P4,800,000 representing rental payment for year 2016 and 2017 Security Deposit of P2,400,000 Annual Property Tax of P30,000
The lease contract provides, among others that the lessee will construct a 5-storey building for parking purposes at a cost of P9,500,000. Ownership of the building shall belong to the lessor upon the expiration or termination of the lease contract. The building was completed on July 1, 2018 with an estimated useful life of 15 years.
Problem 1: Compute the amount of deduction that Mr. J can claim in relation to:
a. 2016 leaseb. 2017 leasec. 2018 leased. 2019 lease
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