Cory incurred and paid the following expenses: Calculate the amount that Cory can deduct (before any percentage limitations).
A)$5,000.
B)$4,600.
C)$3,000.
D)$1,500.
E)None of the above.

Question

Cory incurred and paid the following expenses:  Calculate the amount that Cory can deduct (before any percentage limitations).
A)$5,000. 
B)$4,600. 
C)$3,000. 
D)$1,500. 
E)None of the above.

Quizplus · Accepted Answer

- The expense for the home office ($900) and the advertising cost ($500) are fully deductible.
- The business use of the car expense is calculated as follows: 
  - 11,000 miles x $0.58/mile = $6,380 
  - However, the personal use of the car percentage is not given. Therefore, we cannot determine the exact amount of the deductible car expense. However, we can eliminate answer choices A and C, which suggest that the full $6,380 is deductible, and answer choice D, which suggests a very low amount.
- The supplies expense ($1,200) is also deductible.
- Therefore, the total deductible amount is: $900 + $500 + (determined car expense amount) + $1,200 = $4,600.

Cory Incurred and Paid the Following Expenses: Calculate the Amount