Question

Malcolm Figueroa is a sales employee of Carefree Pools and Spas, Inc. During 2018, he was issued a company car with a fair market value of $35,000. He drove a total of 22,000 miles, used the car for 3,600 miles for personal use, and his employer paid for fuel, charging Malcolm 5.5 cents per mile. Required: Under the lease value rule, what is the amount that must be added to Malcolm's gross pay for 2018? (Use the table for lease values.) (Round your intermediate calculations and final answers to 2 decimal places.) Carefree Pools and Spas, Inc. Worksheet to Calculate Personal use of Company Vehicle (Lense.Value Rule) Employee Name: Malcolm Figueros Annual Lease Method: 1. Fair Market Value of Vehicle: 2. Annu La Value: 3. Prorated Annual Lease Percentage 4. Prorated Annual Lease Value: Annual Lease Value Prorated Annual Lease Percentage 5. If fuel is provided by the employer, enter personal mich Total fuel charge for the personal miles driven 16. Total Personal Use Taxable income

Answer 1

As per publication 15-b Of employers tax guide fringe benefits provides you how to use lease value rules and when to use , The following question is answered according to it

	Employee Name : Malcolm Figueroa
	Annual Lease Method :
1	Fair market value of vehicle	35000
2	Annual lease value :	9250
3	Prorated Annual lease percentage	3600	/	22000	=	16.3636%
4	Prorated Annual lease Value:	Annual lease value	*	Prorated Annual lease percentage	=	$
		9250	*	16.3636%	=	1513.633$
5	iF FUEL PROVIDED BY EMPLOYER ENTER MILE	3600	*	5.5cents	=	198$
	Total fuel charges				=	198$
6	Total personal Use Taxable income	1513.633	+	198	=	$1711.633

First we will find the annula lease value from table given by using fmv of automobile i.e for 35000 its 9250

Now we will Multiple  annual lease value by % of personal driven by employee

whcih is calculated by 3600/22000*100= 16.3636%

9250*16.3636%= 1513.633

So this the personal usage vehicle which will be added = $1513.633

And we will add the fuel cost to this amount which is = 3600*5.5cents= $198

total personal use taxable = $1711.633