McGraw-Hill's Taxation of Individuals 3rd Edition by Brian Spilker,Benjamin Ayers,John Robinson,Edmund Outslay ,Ronald Worsham,John Barrick,Connie Weaver

Exercise 55

Assume that a friend has accepted a position working as an accountant for a large automaker.As a signing bonus, the employer provides the traditional cash incentive but also provides the employee with a vehicle not to exceed a retail price of $25,000.Explain to your friend whether the value of the vehicle is included, excluded, or partially included in the employee's taxable income.