IRS releases 2008 FMVs for business autos and trucks

The IRS has released the 2008 maximum fair market values (FMVs) for employer-provided automobiles, trucks and vans. These values are used to determine the amount of taxable fringe benefit compensation to an employee who is given the use of a company car or truck for personal purposes. If the value is above a certain designated amount, it is considered sufficiently “luxurious” that the taxable amount can’t be figured simply on a standard mileage allowance amount.

The new 2008 FMVs, which are slightly lower than 2007 values, apply only to vehicles first used in 2008 and for which the vehicle cents-per-mile rule and the fleet-average valuation rules apply. Vehicles purchased in previous years must use the maximum values determined by the IRS for those particular years.

Note. The Economic Stimulus Act of 2008 generously increased the Code Sec. 280F limitations on “luxury” auto depreciation by $8,000 for its new 50-percent bonus depreciation applicable to qualifying property placed in service in 2008. This write-off affects the employer’s tax benefits without adding to any fringe benefit amount for the employee.

Cents-per-mile valuation

The 2008 maximum FMV for use of automobiles and trucks using the vehicle cents-per-mile value rule are:

• $15,400* for a passenger automobile; and
• $15,700* for a truck or van (including automobiles built on a truck chassis, such as minivans and sport-utility vehicles built on a truck chassis).

Caution. We have learned that the IRS will be issuing an official correction to these valuation figures. The cents-per-mile valuation figure for 2008 for cars is $15,000, and the truck and van figure is $15,900. Through independent calculations, we have confirmed that these are the correct figures.

The $15,000/$15,900 FMVs are slightly lower than the 2007 FMVs. In 2007, the maximum FMVs for automobiles was $15,100 and $16,100 for trucks and vans.

Fleet-average valuation

An employer who maintains a fleet of at least 20 automobiles can value the FMV of each vehicle as equal to the average value of the entire fleet. The 2008 maximum FMV for use of the fleet-average valuation rule is:

• $19,900 for a passenger automobile; and
• $20,800 for a truck or van.

These values also reflect a slight decrease over 2007’s maximum FMVs. The FMV for automobiles in 2007 was $20,100, and $21,100 for trucks and vans.

(Rev. Proc. 2008-13).