Paul is a self-employed investment adviser who uses his automobile for business. Paul drove his automobile a total of 20,000 miles during 2016; 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 2015? Why?
d.Where should he deduct the transportation expense on his 2016 tax return?

Question

Paul is a self-employed investment adviser who uses his automobile for business. Paul drove his automobile a total of 20,000 miles during 2016; 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 2015? Why?
d.Where should he deduct the transportation expense on his 2016 tax return?

Quizplus · Accepted Answer

The Answer of Paul is a self-employed investment adviser who uses his automobile for business. Paul drove his automobile a total of 20,000 miles during 2016; 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 2015? Why?
d.Where should he deduct the transportation expense on his 2016 tax return?

Paul Is a Self-Employed Investment Adviser Who Uses His Automobile