CLFP Documentation Practice Exam

The lessee does not reasonably expect to issue tax-exempt obligations in the current year above how much?

5 Million 10 Million 20 Million 50 Million

Correct Answer:

10 Million

Explanation:

In tax-exempt lease financing, the amount of tax-exempt debt the lessee expects to issue in the current year determines which rules apply. If the lessee does not reasonably expect to issue tax-exempt obligations in the current year above ten million, the transaction can follow the simpler tax-exempt financing path. That threshold of ten million dollars is the point at which the treatment changes. So the correct amount is ten million dollars. If the expected issuance were higher, the deal would face additional requirements and constraints.

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