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K is required to use her own automobile for employment purposes. She incurred the following expenses...

K is required to use her own automobile for employment purposes. She incurred the following expenses in the current year: Gasoline $2,100, Insurance $1,200, Repairs $600, Parking for employment purposes $300, Interest on car loan $3,800 for 12 months, and Capital cost allowance $6,000. K drove the car 24000 km of which 14000 km were for employment purposes. What is the maximum amount that K is permitted to deduct from employment income in the current year?

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Answer #1

K is only permitted to claim only the expenditure that she has incurred for employment purpose. She cannot claim the expenditure what she has incurred for his personal Purpose.

Total Expenditure = $2100+ $1200+$600+$3800+$6000+$300

= $ 14000

Maximum Deduction under employment Purpose = ($2100+$1200+$600+$3800+$6000)*14000/24000+$300

= $7,991.66+$300

= $ 8,291.66 or $8,292

Note : Parking Fee is fully relating to employment, so it is fully allowed.

K can claim the maximum deduction $ 8,292 in her income tax return.

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