To be considered reasonable, an allowance paid by an employer to an employee for using their own automobile for employment purposes must be based on the number of kilometres driven for employment purposes.

A. True because an allowance is reasonable only if the allowance is based solely on a fixed monthly amount based on the total estimated number of kilometres the motor vehicle is driven each month.

B. False because an allowance is deemed reasonable when it is solely based on a percentage of a motor vehicle's fair market value.

C. True because an allowance is reasonable if the allowance is based solely on a kilometre rate applied to the number of actual kilometres D. False because the allowance is reasonable when the employee is provided with an allowance and a reimbursement for all of the expenses of using the motor vehicle.