Assignment Problem Three - 5

(Taxable Automobile Benefits)

It is the policy of Caplan Ltd. to provide automobiles to four of their senior executives. The cars may be used for both employment-related activities as well as personal travel. When it is not being used by the employee, the company requires the cars to be returned to the companys garage.

For 2021 ,the details regarding the use of these cars is as follows:

Ms. Barbara Caplan Barbara is provided with a BMW 300 Series, which the company

leases for $650 per month. This amount includes $110 per month for insurance. She

drives a total of 57,000 kilometres of which only 21,000 is employment related and 36000 for personal purpose.Operating costs, all of which were paid by the company, total $11,300. Because of her extensive personal use of the vehicle, Barbara pays the company $200 per month.the vehicle is available to her for 12 months during the current year.

Mr.Sheldon Caplan Sheldon is provided with a Lexus GS, which the company leases for $1,100 per month. No insurance is included in this payment. During the current year,

Sheldon drives the car a total of 34,300 kilometres, of which 32,600 are employment

Related and 1700 for personal use. The operating costs average $0.27 per kilometre and are paid for by the company. The car is available to Sheldon for 8 months during the current year.

Ms. Melissa Caplan Melissa is provided with a Mercedes S Class Sedan. The

company paid $175,000 for this car two years ago. During the current year, the car was

driven 62,000 kilometres, of which 23,000 could be considered to be employment related travel nad 39000 for personal use. Operating costs, all of which were paid by the company, totaled $27,500 for the year. The car was available to Melissa for 11 months of the year.

Mr. Jerome Caplan Jeromes car is an Audi A5 purchased by the company for $74,200. During the 10 months that the car was available to John during the current year, he drove a total of 93,000 kilometers, of which 24,000 for employment purpose and 69,000 for personal use. Operating costs, all of which were paid by the company, total $19,400.

Required: calculate the minimum taxable benefit that will accrue to each of these executives as the result of having the cars supplied by the company. Ignore all GST/HST/PST implications