Can The Corporation Buy Me A Car?
If you receive anything of value from your corporation - be it money, services or property - you must be charged with wages, dividends and/or a loan in the amount or value involved. This includes the personal (including commuting) use of a car owned by the corporation.
Generally, an employee is charged with additional wages (subject to payroll taxes) in an amount equal to the fair value of the personal and commuting use of company vehicles. Whether the corporation owns or leases the vehicle itself, the compensation must be calculated from the table of fair lease values contained in IRS Publication 535. The table amount is multiplied by the percentage of non-business use. To this amount is added the non-business percentage of gas paid for by the corporation. (The table amount
includes maintenance, repairs, insurance, etc.)
There are also alternative methods that can be used to charge employees with personal or commuting use, but these are generally not available to employees with a considerable ownership interest in the corporation.