Question

Problem 3-6 Transportation (LO 3.3) Teresa is a civil engineer who uses her automobile for business. Teresa drove her automobile a total of 11,965 miles during 2019, of which 80% was business mileage. The actual cost of gasoline, oil, depreciation, repairs, and insurance for the year was $6,440. Teresa is eligible to use the actual or standard method. If required, round your answers to the nearest dollar. a. How much is Teresa's transportation deduction based on the standard mileage method? b. How much is Teresa's transportation deduction based on the actual cost method? C. Which method should Teresa use to calculate her transportation deduction? Since the method yields the larger deduction, Teresa should use the method to determine her deduction.

Answer 1

Answert (1) Teresa's transportation deduction based m the standard mileage method Given. Total miles Drove = 11,965 miles, Business miles driven (80 %. of total miles prove) = 11965X80% = 9572 Miles. The business mileage rette was 53.5 Cents per business miles driven for 2019, .: Teresa's transportation deduction based on the standard Mileage method = 9572 miles X53.5 Cent/mile = $5121.02 = $5121 Cround of) (b) Teresa's transportation deduetion based on the actual cost Method. Total cost of gasoline, bil, depreciation, sepairs, and insurance for Business use (80%. Given) 80% of $6440 $ 5152

c) since, the actual cost Method yields $5152 deduction and standard mileage method yields $5121 Deduction Hence, Aeteral cost Method - yields the larger deduction by $31, Teresa should use actual cost method Method for. Transportation Dedertion. plz do like, any doubts do CmatThemke you.