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Thread: Tax Consequenses of a Corporate Membership

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    rcannon100's Avatar
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    Default Tax Consequenses of a Corporate Membership

    Do CABI Corporate Memberships result in a taxable event?

    The ACME Corporation becomes a Gold CABI Partner. The ACME Corporation pays $50 for an employee membership - and the employee pays $0 for the membership. The employee signs up - and uses the annual membership.

    Hasnt this just created a taxable event? Hasnt ACME just given the employee a $50 benefit, and the employee must pay income tax on that $50? Is there any authoritative informmation on this?

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    how about this. I was awarded an annual memebership by being named rider of the month, and I then donated it to WABA, do I get to claim the deduction?

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    If this is a taxable event, maybe... (do you itemize?). The bigger prob is that you are going to need lots of paper (something to report the income, and something to back it back out)

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    Some employee benefits are taxable and others are not. It looks like it falls into the de minimus exception for transportation and commuting expense and is not taxable. See http://www.irs.gov/publications/p15b/index.html

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    I have been told from someone in authority that

    Capital Bikeshare does not qualify under the 132(f) IRS transit tax benefit
    Which returns me to a strong concern that this is a taxable benefit.

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    If you have received CABI as a corporate benefit, you may wish to consult with your management on whether it is a taxable benefit. At this point I am under the understanding that it is in fact taxable.

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    And make it official. The IRS has issued an advisory letter stating that CABI benefits to employees is a taxable benefit.

    http://www.forbes.com/sites/robertwo...es-bike-share/

    The IRS was asked to approve bike share as qualifying for the Transportation (Commuting) Benefits Program under Fringe Benefit Rules for transit. I’ll explain what this means, but the short answer is that the IRS says no. See IRS Information Letter 2013-0032.
    Some cycling advocate org wanna appeal this

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    I think Dismal may have a point -- from the IRS Publication, it would seem that $50/year (less than $1/week) would be de minimis. The IRS Letter does not touch on the de minimis exception (132(e)).

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    I would think that some strongly worded letters to our elected representatives may help to put pressure on the IRS to recognize the reality of transportation alternatives. When transit subsidies were first introduced in the '80s and '90s bike sharing wasn't an option. The tax code reflected that reality and there have been patches applied from time to time.

    I have sent letters on the bike commuter subsidy (and the way it precludes multi-modal transit) and will share them when I get back to DC. I'll probably have one done on the IRS finding as well.

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    The text of the proposed House Resolution 2288 suggests that the option for bikesharing has been included in the tax code. The text of that resolution was discussed in an earlier post.

    The resolution is at http://thomas.loc.gov/cgi-bin/query/z?c113:H.R.2288:

    http://bikearlingtonforum.com/showth...5687#post65687

    Note the definition below (with emphasis added):

    `(F) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT- For the purposes of this subsection, the term `qualified bicycle commuting reimbursement' means any employer reimbursement for reasonable expenses incurred by the employee for the purchase of a bicycle and bicycle improvements, repair, and storage, or bikesharing program, if such bicycle is regularly used for travel between the employee's residence and place of employment.

    Please look at my earlier post to see the changes I think are needed (specifically changing the code to allow receipt of both a bike and a transit subsidy).

    The path seems to be to adjust the HR to include simultaneous receipt of the benefits by tweaking para (f)(2)(A) and then encouraging our Representatives and Senators to get the changes passed into law.

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