National Boats manufactures pleasure boats sold to consumers. The boats range in price from $40,000 to $1,500,000. Jake is the president of National Boats. The company provides Jake with one of its more expensive boats. The company pays for fuel, insurance, and other costs and deducts these expenses along with depreciation on the boat. The company states that Jake is responsible for testing and for demonstrating the boat to possible customers. Jake has had the same boat for two years, and the company plans to provide him with a new boat next month. You asked Jake how often he uses the boat. He indicated that he uses it once or twice each month on weekends, except during the winter. You asked him who accompanies him, and what types of testing he conducts. He seemed reluctant to answer the question, but acknowledged that his family often accompanies him on the boat, and said that he tests it during ordinary operations to determine how it performs. He added that potential customers who have also accompanied him included neighbors and friends. What tax issues do you see?

Answer rating: 100% (QA)

There are several tax issues that could arise from the scenario described 1 Taxable fringe benefits ... View the full answer