Internal Revenue Service
Revenue Ruling

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Rev. Rul. 2004-36
Rev. Rul. 2004-36, 2004-12 I.R.B. 620
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
                   FRINGE BENEFITS AIRCRAFT VALUATION FORMULA
                            Published: March 22, 2004

 26 CFR 1.61-21: Taxation of fringe benefits.

  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.

  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:

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   Period During Which the       Terminal            SIFL Mileage Rates
       Flight Is Taken            Charge
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
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DRAFTING INFORMATION

  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).

 Rev. Rul. 2004-36, 2004-12 I.R.B. 620