Internal Revenue Bulletin: 2004-12
March 22, 2004
Table of Contents
Fringe benefits aircraft valuation formula. For purposes of section 1.61-21(g) of the regulations, the Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charge in effect for the first half of 2004 are set forth for determining the value of non-commercial flights on employer-provided aircraft.
For purposes of the taxation of fringe benefits under section 61 of the Internal Revenue Code, section 1.61-21(g) of the Income Tax Regulations provides a rule for valuing noncommercial flights on employer-provided aircraft. Section 1.61-21(g)(5) provides an aircraft valuation formula to determine the value of such flights. The value of a flight is determined under the base aircraft valuation formula (also known as the Standard Industry Fare Level formula or SIFL) by multiplying the SIFL cents-per-mile rates applicable for the period during which the flight was taken by the appropriate aircraft multiple provided in section 1.61-21(g)(7) and then adding the applicable terminal charge. The SIFL cents-per-mile rates in the formula and the terminal charge are calculated by the Department of Transportation and are reviewed semi-annually.
The following chart sets forth the terminal charges and SIFL mileage rates:
|Period During Which the Flight Is Taken||Terminal Charge||SIFL Mileage Rates|
|1/1/04 - 6/30/04||$34.45||Up to 500 miles= $.1884 per mile|
|501-1500 miles= $.1437 per mile|
|Over 1500 miles= $.1381 per mile|
The principal author of this revenue ruling is Kathleen Edmondson of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding this revenue ruling, contact Ms. Edmondson at (202) 622-6040 (not a toll-free call).
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