Question

Mr. Wong is an employee that is provided with an automobile that his employer leases at a cost of $1,050 per month including all taxes. The total operating costs of the car were $0.60/km for the year and they were all paid by the employer. The car was available to Mr. Wong the entire year, except that he didn't use the car for a 3-month period while he was on a disability leave. Mr. Wong drove the car a total of 50,000kms during the year, of which 20,000kms were employment related (fully documented). Mr. Wong reimbursed his employer $1,000 for his personal use of the automobile for the year.

Which of the following answers corresponds to the automobile taxable benefit to be included in Mr. Wong's Net Employment Income for the year?

		$16,800
		$4,040
		$25,400
		$12,440
		$13,700
		$17,896
		$15,800
		None of the choices shown.

Answer 1

Correct answer is $13,700

Monthly leasing cost (including down payment, trade-in amount, and taxes)1,050.00

Total kilometres driven 50,000

Business-use kilometres 20,000

Number of 30-day periods automobile available 9.00

Percent of business use 40

Standby charge 6,300.00

Operating expense benefit 8,400.00 [ 30000* 28¢ per kilometre of personal use.]

Deemed operating expenses benefit 0.00

Total automobile benefits 14,700.00

Less: Employee reimbursements and/or payments to a third party1,000.00

Automobile benefits to employee 13,700.00

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