Question

Brent Bishop is the vice president of operations for Southern Sweets Bakery, He drives a 2019 Toyota Prius Prime as his company car and it has a fair market value of $37.500. The prorated annual lease value per Publication 15.b for the vehicle is $10,350. He reported driving 35,350 miles during 2019, of which 20 percent were for personal reasons. The company pays his fuel and charges him five cents per mile for fuel charges. Required: Using the lease value rule, what is the valuation of Brent's company car benefit? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Narbon of Bren's company car bent

Answer 1

Solution Armual Lease Value Given in Question = $10350 Step 1: Calulation of Personal use Lease Value - Annual Lease Value X Percentage for Personal Reason = $ 10350 x 20). • $ 2070 Step 2: Calculation of Personal use Miles - Total km x Percentage for Personal Reaison 35 350 x 2014 = 7070 Km

- Step 3: Calculation of Personal use full - Personal Use Miles & Fuel charges for Personal Reason = 7o 70 X 0.05 = $353.5 Stepui Total Valuation of brent's company can benefit as per lase value rule is: - Personal use Lease Value + Personal use fuel (Step: 1) (Step:3) = $ 2070 + $ 353.5 - $ 2423.50