Asked by Gloria Martin-Mays on Jul 15, 2024
Verified
Ted purchased a vehicle for business and personal use.In 2017,Ted used the vehicle 70% for business (10,000 business miles)and used the standard mileage rate to calculate his vehicle expenses.Ted also paid $1,200 in interest and $380 in county property tax on the car.What is the total business deduction related to business use of the car in 2017?
Standard Mileage Rate
A set rate per mile that taxpayers can use to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes.
Vehicle Expenses
Costs incurred from the use of a vehicle for business purposes, including gas, repairs, and insurance, which may be deductible.
- Examine the effects of distinguishing between business and personal use on the tax deductibility of expenses and assets.
Verified Answer
JF
Jeremy FisherJul 22, 2024
Final Answer :
The total business deduction related to business use of the car is calculated as follows:
Standard mileage rate (10,000×53.5 cents /mile)5,350 Interest ($1,200×70%)840 Property taxes ($380×70%)$266 Total auto deduction on Schedule C $6,456\begin{array}{lr}\text { Standard mileage rate }(10,000 \times 53.5 \text { cents } / \mathrm{mile})&5,350\\\text { Interest }(\$ 1,200 \times 70 \%)&840\\\text { Property taxes }(\$ 380 \times 70 \%)&\$266\\\text { Total auto deduction on Schedule C }&\$6,456\end{array} Standard mileage rate (10,000×53.5 cents /mile) Interest ($1,200×70%) Property taxes ($380×70%) Total auto deduction on Schedule C 5,350840$266$6,456
The 30% personal interest is disallowed and the $114 of personal property taxes is deducted on Schedule A if the personal property taxes are based on the vehicles value.
Standard mileage rate (10,000×53.5 cents /mile)5,350 Interest ($1,200×70%)840 Property taxes ($380×70%)$266 Total auto deduction on Schedule C $6,456\begin{array}{lr}\text { Standard mileage rate }(10,000 \times 53.5 \text { cents } / \mathrm{mile})&5,350\\\text { Interest }(\$ 1,200 \times 70 \%)&840\\\text { Property taxes }(\$ 380 \times 70 \%)&\$266\\\text { Total auto deduction on Schedule C }&\$6,456\end{array} Standard mileage rate (10,000×53.5 cents /mile) Interest ($1,200×70%) Property taxes ($380×70%) Total auto deduction on Schedule C 5,350840$266$6,456
The 30% personal interest is disallowed and the $114 of personal property taxes is deducted on Schedule A if the personal property taxes are based on the vehicles value.
Learning Objectives
- Examine the effects of distinguishing between business and personal use on the tax deductibility of expenses and assets.
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