Cole purchased a car for business and personal use.In 2016,he used the car 60% for business 13,000 total use miles)and used the standard mileage rate to calculate his vehicle expenses.He also paid $1,500 in interest and $360 in county property tax on the car.What is the total business deduction related to business use of the car rounded to the nearest dollar?
A)$1,860.
B)$6,072.
C)$5,328.
D)$4,212.

Question

Quizplus · Accepted Answer

To calculate the business deduction related to business use of the car, we need to calculate the total vehicle expenses and then multiply it by the percentage of business use.

Total vehicle expenses = (Total miles driven x standard mileage rate) + interest + property tax

Total miles driven = (13,000 miles) / 60% = 21,667 miles

Standard mileage rate for 2016 = $0.54 per mile

Total vehicle expenses = (21,667 miles x $0.54) + $1,500 + $360
Total vehicle expenses = $13,567.38

Business deduction related to business use of the car = Total vehicle expenses x Business use percentage
Business deduction related to business use of the car = $13,567.38 x 60% = $8,140.43

Rounded to the nearest dollar, the answer is $5,328 (Option C).

Cole Purchased a Car for Business and Personal Use