Publication 15b |
2000 Tax Year |
Cents-Per-Mile Rule
Under this rule, you determine the value of a vehicle you provide
to an employee for personal use by multiplying the standard mileage
rate by the total miles the employee drives the vehicle for personal
purposes. Personal use is any use of the vehicle other than use in
your trade or business. For 2001, the standard mileage rate is 34 1/2 cents a mile.
Maximum automobile value. You cannot use the
cents-per-mile rule for an automobile (any 4-wheeled vehicle, such as
a car, pickup, or van) if its value when you first make it available
to any employee for personal use is more than an amount determined by
the IRS as the maximum automobile value for the year. For example, you
cannot use the cents-per-mile rule for an automobile you first made
available to an employee in 2000 if its value at that time was more
than $15,400. The maximum automobile value for 2001 will be published
in a revenue procedure in the Internal Revenue Bulletin early in 2001.
If you and the employee own or lease the automobile together, see
section 1.61-21(e)(1)(iii) of the regulations.
You can use the cents-per-mile rule if either of the following
requirements is met.
- You reasonably expect the vehicle to be regularly used in
your trade or business throughout the calendar year (or for a shorter
period during which you own or lease it).
- The vehicle meets the mileage test.
Vehicle.
For this rule, a vehicle is any motorized wheeled vehicle,
including an automobile, manufactured primarily for use on public
streets, roads, and highways.
Regular use in your business.
A vehicle is regularly used in your trade or business if at least
one of the following conditions is met.
- At least 50% of the vehicle's total annual mileage is for
your trade or business.
- You sponsor a commuting pool that generally uses the vehicle
each workday to drive at least 3 employees to and from work.
- The vehicle is regularly used in your trade or business on
the basis of all the facts and circumstances. Infrequent business use
of the vehicle, such as for occasional trips to the airport or between
your multiple business premises, is not regular use of the vehicle in
your trade or business.
Mileage test.
A vehicle meets the mileage test for a calendar year if both of the
following requirements are met.
- The vehicle is actually driven at least 10,000 miles during
the year. If you own or lease the vehicle only part of the year,
reduce the 10,000 mile requirement proportionately.
- The vehicle is used during the year primarily by employees.
Consider the vehicle used primarily by employees if they use it
consistently for commuting. Do not treat use of the vehicle by another
individual whose use would be taxed to the employee as use by the
employee.
For example, if only one employee uses a vehicle during the
calendar year and that employee drives the vehicle at least 10,000
miles in that year, the vehicle meets the mileage test even if all
miles driven by the employee are personal.
Consistency requirements.
If you use the cents-per-mile rule, the following requirements
apply.
- You must begin using this rule the first day you make the
vehicle available to any employee for personal use. However, if you
use the commuting rule when you first make the vehicle available to
any employee for personal use, you can change to the cents-per-mile
rule on the first day for which you do not use the commuting
rule.
- You must use this rule for all later years in which you make
the vehicle available to any employee and the vehicle qualifies,
except that you can use the commuting rule for any year during which
use of the vehicle qualifies. However, if the vehicle does not qualify
for the cents-per-mile rule during a later year, you can use for that
year and thereafter any other rule for which the vehicle then
qualifies.
- You must continue to use this rule if you provide a
replacement vehicle to the employee and your primary reason for the
replacement is to reduce federal taxes.
Items included in cents-per-mile rate.
The cents-per-mile rate includes the value of maintenance and
insurance for the vehicle. Do not reduce the rate by the value of any
service included in the rate that you did not provide. (You can take
into account the services actually provided for the vehicle by using
the general valuation rule discussed earlier.)
For miles driven in the United States, its territories and
possessions, Canada, and Mexico, the cents-per-mile rate includes the
value of fuel you provide. If you do not provide fuel, you can reduce
the rate by no more than 5.5 cents.
For special rules that apply to fuel you provide for miles driven
outside the United States, Canada, and Mexico, see section
1.61-21(e)(3)(ii)(B) of the regulations.
The value of any other service you provide for a vehicle is not
included in the cents-per-mile rate. Use the general valuation rule to
value these services.
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