Luis Billiot is an employee of Plato Designs and drives a 2017 Toyota Camry as a company car.The fair-market value of the car is $25,499 and the lease value is $6,850,according to Publication 15-b.The car has been available for 300 days during the year and Luis has driven 5,500 of the 28,350 miles for personal use.He pays for his own fuel.What is the percentage of miles driven for personal use,using the lease-value rule? (Do not round intermediate calculations,only round final answer to two decimal points. )

Question

Quizplus · Accepted Answer

According to the lease-value rule, personal use of a company car is calculated by multiplying the car's lease value by the percentage of personal use.

Lease value = $6,850
Percentage of personal use = (5,500/28,350) x 100% = 19.40%

Personal use = Lease value x Percentage of personal use
Personal use = $6,850 x 19.40% = $1,329.30

Therefore, the percentage of miles driven for personal use using the lease-value rule is: 
Personal use / Fair-market value x 100% = $1,329.30 / $25,499 x 100% = 5.21%

So, the best choice is C) 19.40%.

Luis Billiot Is an Employee of Plato Designs and Drives