Question

8-28 Transpo Tuansportation Expenses. Indicate the amount, if any, deductible by the tax- er in each of the following cases. (Ignore the rules on miscellaneous item- ized deductions.) R owns and operates his own advertising agency as an independent contrac- tor. He works in downtown Denver, but chooses to live in the mountains 90 miles away. During the year, he spent $2,700 for transportation expenses to and from work. a high school basketball coach, liked to scout his opposition. On one Friday afternoon, he left school and drove 40 miles to attend the game of the team he played next. On the way, he stopped for a meal ($5). He watched the game and returned home. R. a carpenter, is an independent contractor. He commutes to work in a truck. He drives the truck in order to carry the tools of his trade. During the year, R's total transportation costs were $5,000. R estimates that his costs of transporta- tion without the tools would have been $4,000, since he otherwise would have taken public transportation. d. G, a self-employed attorney, works downtown. She is on retainer, however, with a client who has offices two miles from her home. G often stops at the client's office before going to work. The distance between these locations is as follows: home to office, 20 miles; home to client, 2 miles; and client to of- fice, 22 miles. During the year, G drove directly to work 180 days and via the client's office 50 days.

Answer 1

Question A..Answer: In this query R has spent $2700 on transportation on to and from work. The law is clear in this regard that nobdy can claim of the cost of getting to and from workspace. Driving to work and associated expense on transportation are of personal nature expense, cant be deductible.

Question B..Answer: In this Query, Q has incurred $ 5 on the meal during the way to watch the match. Its a personal expenses, cant be claimed as transportation expenses as the purpose was also personal.

Question C..Answer: Expenses incurred by R on truck transport with tools is necessary to perform his duty, as he is doing work on site. He commutes to work in a truck only. Hence all expenses are deductive being business expenses. It will not alter the scene that without tools the expenses would have been $4000 as against with tooks $5000. Complete amount is claimable as transportation expenses.

Question D.. Answer: In this Case, G the attorney can maximum claim the transportation expenses for 2 miles for 50 days, when he visited the clients office, though its on the way, but being business talks purpose was there, hence claimable transportation cost is for 100 miles.