January 15, 2010

Non-cash Compensation and Form W-2

Question:

A church gives its pastor a vehicle. How does it report the amount it paid for the vehicle on his Form W-2?

Answer:

According to IRS Publication 15, the fair market value is includible as taxable compensation in Box 1 of Form W-2. Presumably, that amount is equal to the price the church paid for the vehicle.

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