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.

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:<br /><br />### 1. Standby Charge<br /><br />The standby charge is calculated based on the lease payments and the personal use of the vehicle. The formula for the standby charge is:<br /><br />\[<br />\text{Standby Charge} = \left( \frac{2}{3} \right) \times \text{Total Lease Payments} \times \left( \frac{\text{Personal Kilometers}}{20,000} \right)<br />\]<br /><br />Given:<br />- Total Lease Payments for the year = \( \$500 \times 12 = \$6,000 \)<br />- Personal Kilometers = \( 9,000 \)<br /><br />Plug these values into the formula:<br /><br />\[<br />\text{Standby Charge} = \left( \frac{2}{3} \right) \times 6,000 \times \left( \frac{9,000}{20,000} \right)<br />\]<br /><br />\[<br />= 4,000 \times 0.45<br />\]<br /><br />\[<br />= \$1,800<br />\]<br /><br />### 2. Operating Cost Benefit<br /><br />The operating cost benefit is calculated as a fixed rate per personal kilometer driven. For 2024, the rate is typically \( \$0.30 \) per kilometer.<br /><br />\[<br />\text{Operating Cost Benefit} = \text{Personal Kilometers} \times \text{Rate per Kilometer}<br />\]<br /><br />Given:<br />- Rate per Kilometer = \( \$0.30 \)<br />- Personal Kilometers = \( 9,000 \)<br /><br />Calculate the operating cost benefit:<br /><br />\[<br />\text{Operating Cost Benefit} = 9,000 \times 0.30 = \$2,700<br />\]<br /><br />### Minimal Taxable Benefit<br /><br />The minimal taxable benefit is the sum of the standby charge and the operating cost benefit:<br /><br />\[<br />\text{Minimal Taxable Benefit} = \text{Standby Charge} + \text{Operating Cost Benefit}<br />\]<br /><br />\[<br />= \$1,800 + \$2,700<br />\]<br /><br />\[<br />= \$4,500<br />\]<br /><br />Therefore, the minimal taxable benefit for the leased vehicle, including the standby charge and minimal operating charge, is **\$4,500**.