[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.162-25]

[Page 799]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.162-25  Deductions with respect to noncash fringe benefits.

    (a) [Reserved]
    (b) Employee. If an employer provides the use of a vehicle (as 
defined in Sec. 1.61-21(e)(2)) to an employee as a noncash fringe 
benefit and includes the entire value of the benefit in the employee's 
gross income without taking into account any exclusion for a working 
condition fringe allowable under section 132 and the regulations 
thereunder, the employee may deduct that value multiplied by the 
percentage of the total use of the vehicle that is in connection with 
the employer's trade or business (business value). For taxable years 
beginning before January 1, 1990, the employee may deduct the business 
value from gross income in determining adjusted gross income. For 
taxable years beginning on or after January 1, 1990, the employee may 
deduct the business value only as a miscellaneous itemized deduction in 
determining taxable income, subject to the 2-percent floor provided in 
section 67. If the employer determines the value of the noncash fringe 
benefit under a special accounting rule that allows the employer to 
treat the value of benefits provided during the last two months of the 
calendar year or any shorter period as paid during the subsequent 
calendar year, then the employee must determine the deduction allowable 
under this paragraph (b) without regard to any use of the benefit during 
those last two months or any shorter period. The employee may not use a 
cents-per-mile valuation method to determine the deduction allowable 
under this paragraph (b).

[T.D. 8451, 57 FR 57669, Dec. 7, 1992; 57 FR 60568, Dec. 21, 1992]