Question:
1) Sarah purchased a new car at the starting of the year. She makes an adequate accounting to her employer and receives a $2,400 reimbursement in 2013 for employment-related business miles. She incurs the given expense related to both business and personal use:
Gas and Oil .......................................... $6,000
Repairs and maintenance ...................$2,500
Depreciation .........................................$3,000
Insurance ..............................................$1,800
Total ......................................................$13,300
She also spent $200 on tolls and parking that were related to business. During the year she drove a total of 20,000 miles.
a) Determine Sarah's deductible transportation expense, using the actual expense method.
b) Evaluate Sarah's deductible transportation expense, using the standard mileage method.