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Can The Corporation Own a Car and Can I Use It

If you receive anything of value from your corporation - be it money, services or property - you must be charged with wages, dividends and/or a loan in the amount or value involved. This includes the personal (including commuting) use of a car owned by the corporation.

Generally, an employee is charged with additional wages (subject to payroll taxes) in an amount equal to the fair value of the personal and commuting use of company vehicles. Whether the corporation owns or leases the vehicle itself, the compensation must be calculated from the table of fair lease values contained in IRS Publication 535. The table amount is multiplied by the percentage of non-business use. To this amount is added the non-business percentage of gas paid for by the corporation. (The table amount includes maintenance, repairs, insurance, etc.)

There are also alternative methods that can be used to charge employees with personal or commuting use, but these are generally not available to employees with a considerable ownership interest in the corporation.


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We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017