The cost of the purchase of a used automobile is 20,000 including HST. If the automobile is leased, the monthly lease payment is 500 including HST. The automobile is driven for a total of 26,000 km in 2024 and the operating expenses for the year are 4,000. LEASED VEHICLE Assume the automobile is purchased. It was used by an employee for the whole year. The employee drives it for personal purposes for a total of 9,000 kms. Calculate the minimal taxable benefit, including the standby charge and minimal operating charge. Show your work.

Question

The cost of the purchase of a used automobile is 20,000 including HST. If the automobile is leased, the monthly lease payment is 500 including HST. The automobile is driven for a total of 26,000 km in 2024 and the operating expenses for the year are 4,000. LEASED VEHICLE Assume the automobile is purchased. It was used by an employee for the whole year. The employee drives it for personal purposes for a total of 9,000 kms. Calculate the minimal taxable benefit, including the standby charge and minimal operating charge. Show your work.

Answer 1

To calculate the minimal taxable benefit for a leased vehicle used by an employee, we need to determine two components: the standby charge and the operating cost benefit. Let's break down each component:### 1. Standby ChargeThe standby charge is calculated based on the lease payments and the personal use of the vehicle. The formula for the standby charge is:

Given:- Total Lease Payments for the year =

6,000 \)- Personal Kilometers =

Plug these values into the formula:

per kilometer.

Given:- Rate per Kilometer =

Calculate the operating cost benefit:

### Minimal Taxable BenefitThe minimal taxable benefit is the sum of the standby charge and the operating cost benefit:

2,700\]

4,500**.

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