Sarah, an independent consultant, purchased a new car at the beginning of the year. During the year she drove a total 20,000 miles, of which 12,000 related to meetings with clients and other business-related driving. Sarah incurs the following expenses related to both business and personal use:Gas and oil$6,000Repairs and maintenance2,500Depreciation3,000Insurance 1,800Total$13,300She also spent $200 on parking and tolls that were related to business. What are the possible amounts of Sarah's deductible transportation expenses?
What will be an ideal response?
Actual expense method:
| Business portion of operating expenses $13,300 × 12,000/20,000 miles = | $7,980 |
| Business tolls and parking | 200 |
| Deduction under actual expense method | $8,180 |
Standard mileage method:
| 12,000 miles × .545 per mile = | $6,450 |
| Business tolls and parking | 200 |
| Deduction under standard mileage method | $6,650 |
She may take the greater of the two. In this situation, the actual expense method will provide the greater deduction.
You might also like to view...
The year-end adjusting entry to reflect an increase in the value of trading securities includes a
a. debit to Unrealized Gain on Investments. b. debit to Short-Term Investments. c. debit to Allowance to Adjust Short-Term Investments to Market. d. credit to Realized Gain on Investments.
Explain how customers are an important element of the service encounter
What will be an ideal response?
Physical contact is not necessary to be liable for the tort of assault
Indicate whether the statement is true or false
In 1995, Edna R. Murphy executed a quitclaim deed conveying her residence to herself and Dorothy Moore as joint tenants with a right of survivorship. This quitclaim deed was recorded. In 1998, Murphy quitclaimed her interest in the property to another party, who, in 2002, quitclaimed the property back to Murphy. Who owns the property now?
A) Murphy and Moore as joint tenants B) Murphy and Moore as tenants in common C) Murphy, Moore, and the third party as tenants in common D) Murphy and the third party as tenants in common