Tim is an employee of Lenux Corporation.Lenux purchased a car with a fair market value of $50,000 for use by Tim on his business trips.The annual lease-value of this vehicle is $13,250.In the current year, 70 percent of the miles driven by Tim in this vehicle were on business and 30 percent were for his personal use.How much, if any, taxable income does Tim have from his use of this vehicle?
A)0
B)$3,975
C)$13,250
D)$15,000

Question

Quizplus · Accepted Answer

Tim's taxable income from the use of the vehicle is calculated based on the personal use percentage of the annual lease value. Since 30% of the miles driven were for personal use, the taxable income is 30% of the annual lease value: 0.30 * $13,250 = $3,975.

Tim Is an Employee of Lenux Corporation