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  • Writer's pictureDr. Mark Lee Levine, Professor

Auto Expense Issues—Business and Personal Use of the Auto

Treasury Decision 9893 was recently issued to address the concern with the amount of taxable income that is generated for an employee who uses a company vehicle for both business use and personal use. It is true that some employees conveniently “forget” that the use of the company car for personal trips generates taxable income to the employee. Effectively, given the use of the vehicle is an indirect approach to providing compensation or benefit to the employee.

The basic idea is that such use by the employee generates taxable income to the employee. This is explained under final Regulations, Treasury Regulation 1.61-21. Generally, this income is determined on a per mile basis; this per mile amount is often changed, similar to the change in the deduction, per mile, for the business use of an auto.


Dr. Mark Lee Levine,

Professor, University of Denver

For more on this area, see Levine, Mark Lee and Segev, Libbi Levine, Real Estate Transactions, Tax Planning, Chapter 13 (Thomson/West Publishing, 2020).

See also the citations, noted above. Final Regulations have recently been issued by the Treasury to address this taxable income issue. See Treasury Regulation Section 1.61-21.

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