|Doeren Mayhew |
Auto/ truck maximum values updated for 2012 cents-per-mile/fleet-average valuationTaxpayers whose employers provide company cars (or trucks and vans) for their personal use must factor that usage into their gross income. Personal use of a vehicle provided by an employer is considered fringe benefit income, and taxpayers generally may calculate its value using the "cents-per-mile" rule outlined by the IRS. (Under this rule, usage in 2012 is equal to 55.5 cents per mile.)
In order to use the cents-per-mile valuation rule, the vehicle's fair market value may not exceed a specified dollar amount. The IRS periodically updates this amount to reflect the market, and do so again in mid-January by issuing Rev. Proc. 2012-13. For company cars, trucks, or vans first placed into service in 2012 the amounts have increased. The maximum 2012 FMV amounts for use of the cents-per-mile valuation rule are:
It should be noted that the Rev. Proc. 2012-13 dollar caps apply only to qualifying employer-provided automobiles first made available for personal use in calendar year 2012. Vehicles first used for personal purposes in previous years must use the limits designated by the IRS for those years.
Employers with a fleet of at least 20 automobiles can average the value of its fleet to calculate the fair market value of the automobiles within it. The IRS has also updated the maximum fair market value amounts under which vehicles qualify for the use of the fleet-average valuation rule in 2012. They are $21,100 for a passenger automobile and $21,900 for a truck or van. The fleet-average valuation rule cannot be used if the value of any vehicle in the fleet exceeds these FMVs.
Please feel free to call Doeren Mayhew for a more targeted explanation of how these new regulations impact your business operations.