S Corp officer uses a company vehicle for both business and personal use. The officers' W-2 shows the $7K PUCC in box 1 wages, which is correct.

The IRS instructions state that greater than 2% officer's fringe benefits should be reported as Officer Salaries on line 7. The IRS instructions also state that the 1120-S should report the actual auto expenses.

How should this be reconciled on the 1120-S? I don't see any specific examples of how to report PUCC on the expense side. 

Is the personal use amount included on the W-2 box 1 and on F 1120-S line 7, reported as a M-1 item?

Or should the auto expenses be reduced by the amount of the officer's PUCC?

I guess I'm hung up on the instructions that state the company should report the actual auto expenses.

Thanks for your help.