Employer Owned Vehicle

When a church owns the vehicle driven by the Pastor and the Pastor uses the
vehicle for personal use, an amount must be added to his income.  Personal use
is any use which is not church business.  Commuting is considered personal use. 
The Pastor must log his miles and provide the church with a statement showing the
business miles driven and the total miles driven. 

Calculating Personal Use on an Employer Owned Vehicle

Subtract the pastor's business miles from his total miles.  This gives you his
personal miles.  Divide his personal miles by the total miles.  This give you the
percentage of personal use.

Using the Annual Leave Value table below, multiple the percent of personal use by
the annual lease value (if the vehicle was not made available for the entire year,
multiple by the fraction - the number of days available divided by 365).  Add this
amount to the Pastor's income on his W-2, block 1*. 

*If the employer provides the gasoline then add 5½ cents for each personal mile.
  If the employee provides the gasoline then deduct 5½ cents for each business mile.

Annual Lease Value

Generally, you figure the annual lease value of an automobile as follows.

1)  Determine the fair market value (FMV) of the automobile on the first date it is
available to any employee for personal use.

2)  Using the following Annual Leave Value Table, read down column (1) until you
come to the dollar range within which the FMV of the automobile falls.  Then read
across to column (2) to find the annual lease value.

For automobiles with a FMV of more than $59,999, the annual lease value equals
(.25 x the FMV of the automobile) + $500.

For more information refer to IRS Publication 15-B.