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Table 3-1. Annual Lease Value Table
(1) Automobile FMV (2) Annual Lease
Value
$ 0 to 999 ........................ $ 600
1,000 to 1,999 .................... 850
2,000 to 2,999 .................... 1,100
3,000 to 3,999 .................... 1,350
4,000 to 4,999 .................... 1,600
5,000 to 5,999 .................... 1,850
6,000 to 6,999 .................... 2,100
7,000 to 7,999 .................... 2,350
8,000 to 8,999 .................... 2,600
9,000 to 9,999 .................... 2,850
10,000 to 10,999 ................... 3,100
11,000 to 11,999 ................... 3,350
12,000 to 12,999 ................... 3,600
13,000 to 13,999 ................... 3,850
14,000 to 14,999 ................... 4,100
15,000 to 15,999 ................... 4,350
16,000 to 16,999 ................... 4,600
17,000 to 17,999 ................... 4,850
18,000 to 18,999 ................... 5,100
19,000 to 19,999 ................... 5,350
20,000 to 20,999 ................... 5,600
21,000 to 21,999 ................... 5,850
22,000 to 22,999 ................... 6,100
23,000 to 23,999 ................... 6,350
24,000 to 24,999 ................... 6,600
25,000 to 25,999 ................... 6,850
26,000 to 27,999 ................... 7,250
28,000 to 29,999 ................... 7,750
30,000 to 31,999 ................... 8,250
32,000 to 33,999 ................... 8,750
34,000 to 35,999 ................... 9,250
36,000 to 37,999 ................... 9,750
38,000 to 39,999 ................... 10,250
40,000 to 41,999 ................... 10,750
42,000 to 43,999 ................... 11,250
44,000 to 45,999 ................... 11,750
46,000 to 47,999 ................... 12,250
48,000 to 49,999 ................... 12,750
50,000 to 51,999 ................... 13,250
52,000 to 53,999 ................... 13,750
54,000 to 55,999 ................... 14,250
56,000 to 57,999 ................... 14,750
58,000 to 59,999 ................... 15,250
For automobiles with an FMV of more than $59,999,
the annual lease value equals (0.25 × the FMV of the au-
tomobile) + $500.
FMV. The FMV of an automobile is the amount a person
would pay to buy it from a third party in an arm's-length
transaction in the area in which the automobile is bought
or leased. That amount includes all purchase expenses,
such as sales tax and title fees.
If you have 20 or more automobiles, see Regulations
section 1.61-21(d)(5)(v). If you and the employee own or
lease the automobile together, see Regulations section
1.61-21(d)(2)(ii).
You don't have to include the value of a telephone or
any specialized equipment added to, or carried in, the au-
tomobile if the equipment is necessary for your business.
However, include the value of specialized equipment if the
employee to whom the automobile is available uses the
specialized equipment in a trade or business other than
yours.
Neither the amount the employee considers to be the
value of the benefit nor your cost for either buying or leas-
ing the automobile determines its FMV. However, see
Safe-harbor value next.
Safe-harbor value. You may be able to use a
safe-harbor value as the FMV.
For an automobile you bought at arm's length, the
safe-harbor value is your cost, including sales tax, title,
and other purchase expenses. This method isn’t available
for an automobile you manufactured.
For an automobile you lease, you can use any of the
following as the safe-harbor value.
•
The manufacturer's invoice price (including options)
plus 4%.
•
The manufacturer's suggested retail price minus 8%
(including sales tax, title, and other expenses of pur-
chase).
•
The retail value of the automobile reported by a na-
tionally recognized pricing source if that retail value is
reasonable for the automobile.
Items included in annual lease value table. Each an-
nual lease value in the table includes the value of mainte-
nance and insurance for the automobile. Don't reduce the
annual lease value by the value of any of these services
that you didn't provide. For example, don't reduce the an-
nual lease value by the value of a maintenance service
contract or insurance you didn't provide. You can take into
account the services actually provided for the automobile
by using the general valuation rule discussed earlier.
Items not included. The annual lease value doesn't
include the value of fuel you provide to an employee for
personal use, regardless of whether you provide it, reim-
burse its cost, or have it charged to you. You must include
the value of the fuel separately in the employee's wages.
You can value fuel you provided at FMV or at 5.5 cents per
mile for all miles driven by the employee. However, you
can't value at 5.5 cents per mile fuel you provide for miles
driven outside the United States (including its territories),
Canada, and Mexico.
If you reimburse an employee for the cost of fuel, or
have it charged to you, you generally value the fuel at the
amount you reimburse, or the amount charged to you if it
was bought at arm's length.
If you have 20 or more automobiles, see Regulations
section 1.61-21(d)(3)(ii)(D).
If you provide any service other than maintenance and
insurance for an automobile, you must add the FMV of
that service to the annual lease value of the automobile to
figure the value of the benefit.
4-year lease term. The annual lease values in the table
are based on a 4-year lease term. These values will gen-
erally stay the same for the period that begins with the first
date you use this rule for the automobile and ends on De-
cember 31 of the fourth full calendar year following that
date.
28 Publication 15-B (2024)