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Mandy is an employee who must use her personal automobile for employment-related business trips. During 2016, Mandy drives her car 70% for business use and incurs the following total expenses (100% use of car):

Gas and oil $14,000 Repairs 2,600 Depreciation 4,900 Insurance and license fees 1,400 Parking and tolls (business related) 50 Total $22,950 Mandy drives her car a total of 20,000 miles (14,000 business miles) during 2016 and receives a reimbursement of 40 cents per mile from her employer. Assume that an adequate accounting is made to Mandy's employer.

1. What amount is deductible (before the 2% nondeductible floor) if Mandy uses the standard mileage method?

2. What amount is deductible (before the 2% nondeductible floor) if Mandy uses the actual cost method?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92748858

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