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Frances McNale is an employee who drives a 2019 Ford C-Max with a fair-market value of $29,500. The lease value is $7,750, according to Publication 15-b. The car was available for 150 days during the year, and she reported that 6,500 of the 27,850 miles were driven for personal purposes. The company pays for all fuel and is charged back to Frances at $0.055 per mile. What is the amount of the company-car fringe benefit that will appear on Frances's W-2, using the lease-value rule? (Do not round intermediate calculations, only round final answer to two decimal points.)

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Answer:

$1,100.86 ≈ $1,101

Explanation:

Prorated annual lease value per publication 15-b  = $7,750 x (150 / 365) = $3,185

McNale's personal use lease value = $3,185 x (6,500 / 27,850) = $743.36

Personal use fuel: 6,500 miles x $0.055 per mile = $357.50

McNale's total personal use taxable income: $743.36 + $357.50  = $1,100.86

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