Question

Connie’s employer provided her with a company vehicle that she is allowed to drive home.Connie is allowed to use the vehicle for personal use. What portion of the vehicle usage is taxable to Connie?

a) Connie’s business and personal use of the vehicle are taxable.
b) None of the vehicle usage is taxable to Connie.
c) Only the personal use portion that is not commuting to and from work is taxable.
d) Connie’s personal use of the vehicle is taxable.

Answer 1

D

Step-by-step explanation:

Answer 2

d) Connie’s personal use of the vehicle is taxable.

Step-by-step explanation:

The IRS considers the following as personal use of a company's car:

1. commuting to and from work (it is your responsibility to get to work, not the company's)
2. vacation use
3. if a family member, friend or anyone else not employed by the company uses the car
4. any trips that is not strictly for business purposes, and this includes trips for medical issues

Personal use of a car company is considered a fringe benefit which is taxed as ordinary income.