Tax Tip of the Day: Auto/ Truck Maximum Values Updated for 2012 Cents-Per-Mile/ Fleet-Average Valuation

Taxpayers 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.)

Cents-per-mile Valuation

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:

• $15,900 for a passenger automobile (up from $15,300 in 2011); and
• $16,700 for a truck or van, including passenger automobiles such as minivans and sport utility vehicles, which are built on a truck chassis (up from $16,200 in 2011).

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.   

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