Question

7. With respect to employment related automobile costs and benefits, which of the following statements is correct? A. When an employee is provided with an automobile that is purchased by the employer for $50,000, the taxable benefit to the employee will be based on the prescribed limit of $30,000. B. An employee who uses his own vehicle for employment related activities cannot deduct any financing costs related to the acquisition of the car. C. An employee who is provided with a vehicle owned by his employer can deduct capital cost allowance to the extent that the vehicle is used for employment related activities. D. If an employee drives an employer provided vehicle for more than 20,004 kilometers of personal use during a year, there will be no reduction of the basic standby charge.

Answer 1

B. An employee who uses his own vehicle for employment related activities cannot deduct any financing costs related to the acquisition of the car.

An employee can claim the runnding expenses for the car which he owns from the employer but not for acquisition of car. The financing cost cannot be deducted if the car is used in employee related work

If any doubt please comment