Paul is a self-employed investment adviser who uses his automobile for business. Paul drove his automobile a total of 20,000 miles during 2015; 75 percent was business mileage. The actual cost of gasoline, oil, depreciation, repairs, and insurance for the year was $6,200.
a.How much is Paul's transportation deduction based on the standard mileage method?
b.How much is Paul's transportation deduction based on the actual cost method?
c.
Which method should Paul use to calculate his transportation deduction, assuming he used the standard mileage method in 2014? Why?
d.Where should he deduct the transportation expense on his 2015 tax return?
Correct Answer:
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