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In: Accounting

Marc Lusebrink, sole proprietor of Oak Company, bought a used automobile and drove it 13,326 miles...

Marc Lusebrink, sole proprietor of Oak Company, bought a used automobile and drove it 13,326 miles for business during 2017 and a total (including business miles) of 16,250 miles. His total expenses for his automobile for the year are:

Gasoline $2,061
Oil changes 92
Insurance 1,030
Tires 225
Repairs 620
Total $4,028

The automobile cost $15,000 on January 1, and depreciation expense for the year, including business use, was $3,000. His business parking and toll fees for business amount to $327.

Calculate Marc's transportation expense deduction for the year under each method listed below.

Round business use to the nearest whole percentage. If required, round your answers to the nearest dollar.

Standard Mileage Method: $

Actual Cost Method:

Solutions

Expert Solution

Particulars Mileage method Actual cost
Gasoline               -          2,061
Oil changes               -                92
Insurance               -          1,030
Tires               -              225
Repairs               -              620
Parking and toll fee            327            327
Business mileage        7,129               -  
Depreciation               -          2,460
Transportation expense        7,456        6,815
Business use 0.820062

ekkarill92 answered 2 years ago
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