FPC COMPREHENSIVE EXAMINATION
GUIDE 2026 FULL Q&A STUDY SET
◉ An employee, age 52, is provided with $150,000.00 of group-term
life insurance. Using IRS Table 1 Uniforms Premium for GLT which is
located in the Tables and Rates on the toolbar, calculate the monthly
taxable value of this coverage..
Answer: $23.00
Under IRS rules, calculate the taxable value of excess GTL coverage
with six steps: 1) Determine the GTL coverage; 2) Calculate the
excess coverage (the amount over $50,000); 3) Divide the excess by
$1,000; 4) Determine the employee's age on December 31; 5) Using
IRS Table 1 Uniform Premium for one month, multiply the value for
the employee's age by the amount from Step 3; 6) Subtract any after-
tax GTL deductions from the employee's pay to determine the
taxable amount.
◉ All of the following types of compensation are taxable EXCEPT:
-a gold watch (costing $300.00) awarded to an employee for 30
years of service with the company.
-a trip for two to Las Vegas given to an outside salesperson for
exceeding sales goals by 150%.
,-a $1,000.00 gift certificate awarded to a payroll supervisor for cost-
cutting suggestions.
-a $5,000.00 check to a marketing representative for sales efforts..
Answer: a gold watch (costing $300.00) awarded to an employee for
30 years of service with the company.
◉ An employer reimburses 100% of an employee's monthly parking
for a parking space near the employee's work site. The parking fees
are $264.00 per month. Calculate the monthly taxable amount of the
parking reimbursement..
Answer: $0.00
Under IRS qualified transportation fringe benefit rules, the fair
market value of parking near the employee's work site or at a park
and ride, in excess of the monthly exclusion ($270.00 in 2021) is the
monthly taxable value.
◉ Which of the following employer-provided benefits is taxable?
-Employer provided group-term life insurance less than $50,000
-No-additional-cost services
-Qualified employee discounts
-Prize from a company-sponsored sales contest.
Answer: Prize from a company-sponsored sales contest
,◉ An employee drove a company vehicle 5,000 miles for business
and 6,000 miles for personal use. The car is valued at $54,100.00.
Which of the following statements regarding the employee's use of
this vehicle is true?
-Of the safe-harbor methods, the employer must use the annual
lease value method to report the value of the employee's personal
use of the vehicle.
-The employer must calculate the personal use of the vehicle using
the cents-per-mile method.
-The employer must withhold federal income tax on the personal use
of the vehicle.
-The employee drove more personal than business miles and cannot
claim the vehicle as a company vehicle..
Answer: Of the safe-harbor methods, the employer must use the
annual lease value method to report the value of the employee's
personal use of the vehicle.
◉ An employee drove a company vehicle 5,000 miles for business
and 6,000 miles for personal use. The car is valued at $53,450.00.
Which of the following statements regarding the employee's use of
this vehicle is true?
, -Using the cents-per-mile method, the employee's personal use of
the vehicle is valued at $3,360.00.
-The employer must withhold social security and Medicare taxes on
the personal use of the vehicle.
-The employee drove more personal than business miles and cannot
claim the vehicle as a company vehicle.
-The employer must withhold federal income tax on the personal use
of the vehicle..
Answer: The employer must withhold social security and Medicare
taxes on the personal use of the vehicle.
◉ All of the following benefits are taxable EXCEPT:
-company-paid transit pass valued at $50.00 per month.
-reimbursements for meal expenses incurred during relocation.
-the personal use of a company car.
-company-paid premiums for $100,000.00 in employee group-term
life insurance..
Answer: company-paid transit pass valued at $50.00 per month.
◉ Employers may provide qualified transportation fringe benefits
for:
-transit passes for public buses not to exceed $270.00 per month.
GUIDE 2026 FULL Q&A STUDY SET
◉ An employee, age 52, is provided with $150,000.00 of group-term
life insurance. Using IRS Table 1 Uniforms Premium for GLT which is
located in the Tables and Rates on the toolbar, calculate the monthly
taxable value of this coverage..
Answer: $23.00
Under IRS rules, calculate the taxable value of excess GTL coverage
with six steps: 1) Determine the GTL coverage; 2) Calculate the
excess coverage (the amount over $50,000); 3) Divide the excess by
$1,000; 4) Determine the employee's age on December 31; 5) Using
IRS Table 1 Uniform Premium for one month, multiply the value for
the employee's age by the amount from Step 3; 6) Subtract any after-
tax GTL deductions from the employee's pay to determine the
taxable amount.
◉ All of the following types of compensation are taxable EXCEPT:
-a gold watch (costing $300.00) awarded to an employee for 30
years of service with the company.
-a trip for two to Las Vegas given to an outside salesperson for
exceeding sales goals by 150%.
,-a $1,000.00 gift certificate awarded to a payroll supervisor for cost-
cutting suggestions.
-a $5,000.00 check to a marketing representative for sales efforts..
Answer: a gold watch (costing $300.00) awarded to an employee for
30 years of service with the company.
◉ An employer reimburses 100% of an employee's monthly parking
for a parking space near the employee's work site. The parking fees
are $264.00 per month. Calculate the monthly taxable amount of the
parking reimbursement..
Answer: $0.00
Under IRS qualified transportation fringe benefit rules, the fair
market value of parking near the employee's work site or at a park
and ride, in excess of the monthly exclusion ($270.00 in 2021) is the
monthly taxable value.
◉ Which of the following employer-provided benefits is taxable?
-Employer provided group-term life insurance less than $50,000
-No-additional-cost services
-Qualified employee discounts
-Prize from a company-sponsored sales contest.
Answer: Prize from a company-sponsored sales contest
,◉ An employee drove a company vehicle 5,000 miles for business
and 6,000 miles for personal use. The car is valued at $54,100.00.
Which of the following statements regarding the employee's use of
this vehicle is true?
-Of the safe-harbor methods, the employer must use the annual
lease value method to report the value of the employee's personal
use of the vehicle.
-The employer must calculate the personal use of the vehicle using
the cents-per-mile method.
-The employer must withhold federal income tax on the personal use
of the vehicle.
-The employee drove more personal than business miles and cannot
claim the vehicle as a company vehicle..
Answer: Of the safe-harbor methods, the employer must use the
annual lease value method to report the value of the employee's
personal use of the vehicle.
◉ An employee drove a company vehicle 5,000 miles for business
and 6,000 miles for personal use. The car is valued at $53,450.00.
Which of the following statements regarding the employee's use of
this vehicle is true?
, -Using the cents-per-mile method, the employee's personal use of
the vehicle is valued at $3,360.00.
-The employer must withhold social security and Medicare taxes on
the personal use of the vehicle.
-The employee drove more personal than business miles and cannot
claim the vehicle as a company vehicle.
-The employer must withhold federal income tax on the personal use
of the vehicle..
Answer: The employer must withhold social security and Medicare
taxes on the personal use of the vehicle.
◉ All of the following benefits are taxable EXCEPT:
-company-paid transit pass valued at $50.00 per month.
-reimbursements for meal expenses incurred during relocation.
-the personal use of a company car.
-company-paid premiums for $100,000.00 in employee group-term
life insurance..
Answer: company-paid transit pass valued at $50.00 per month.
◉ Employers may provide qualified transportation fringe benefits
for:
-transit passes for public buses not to exceed $270.00 per month.
