In 2013, the Margate Corporation acquired an automobile with a cost of $30,000 for use in its business Shortly thereafter, Margate Corporation experienced a decline in sales Several employees were laid off, and the automobile was not immediately needed for any of the sales personnel Instead of lett...

For 2013 and 2014 the corporation should have reported the value of the officers personaluse benefit ...

In 2013, the Margate Corporation acquired an automobile with a cost of $30,000 for use in its

Question:

In 2013, the Margate acquired an automobile with a cost of $30,000 for use in its business. Shortly thereafter, Margate experienced a decline in sales. Several employees were laid off, and the automobile was not immediately needed for any of the sales personnel. Instead of letting the new automobile sit in the corporate lot, the president decided to permit a corporate officer to use the automobile for personal use. The officer used the automobile in 2013 and 2014 only. In 2015, Margate hired you as their new CPA (tax consultant). You learn that the officer’s personal use of the corporate automobile took place for the two prior years without proper accounting to the IRS. As Margate Corporation’s tax consultant, what actions (if any) should you take regarding the proper treatment of the automobile? What are your responsibilities as a CPA regarding this matter under the rules of the AICPA’s SSTS No. 6?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...