Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Chapter 3, Problem 6MCQ
To determine
Concept Introduction:
The standard mileage method is one of the methods of calculating transportation costs for the purpose of deduction of transportation costs from the business income. There are some conditions to avail this method as follows:
- The taxpayer should own or lease the automobile.
- The taxpayer should not operate a group of automobiles.
- The taxpayer should have used the straight-line depreciation for calculation of depreciation.
- The taxpayer should not have claimed Section 179.
To choose: The correct option for user of the standard mileage method of calculating transportation costs.
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Students have asked these similar questions
Which of the following taxpayers may not use the standard mileage method of calculating transportation costs?
a.A self-employed CPA who drives a computer-equipped minivan to visit clients.
b.An attorney who uses his Tesla for calling on clients.
c.A taxpayer who has a fleet of 10 business automobiles.
d.A real estate salesperson who drives a $70,000 Mercedes while showing houses.
e.All of these taxpayers may use the standard mileage method.
Explain how business owners can take advantage of leasing a vehicle used for both business and pleasure for tax purposes.
Examine the rules for claiming deductions for business vehicles and recommend one method of cost recovery that would result in the largest tax deduction for your client. Support your recommendation.
A landlord who receives prepaid rent is required to report that amount as gross income when the payment is received. Why would Congress choose to do this? What problem does this create for the taxpayer?
C
O A. Congress taxes prepaid rental income due to the concern that taxpayers who spend the money will be unable to pay the tax when t comes due. The problem created for taxpayers is that they are taxed before they incur related expenses, such as repairs,
insurance, and depreciation. Therefore, there is a mismatching of revenue and expense.
O B.
O C.
Congress taxes prepaid rental income to collect more taxes from a taxpayer by increasing their tax bracket with the additional income. The problem this causes for the taxpayer is inconsistent taxable income from year to year and increases the risk of an audit.
O D. Congress taxes prepaid rental income due to numerous landlords not reporting this income in the following tax year. The problem created for taxpayers is that they are taxed…
Chapter 3 Solutions
Income Tax Fundamentals 2020
Ch. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Which of the following formulas represents the...Ch. 3 - Prob. 5MCQCh. 3 - Prob. 6MCQCh. 3 - Heather drives her minivan 953 miles for business...Ch. 3 - Prob. 8MCQCh. 3 - Prob. 9MCQCh. 3 - Under the high-low method, the federal per diem...
Ch. 3 - Prob. 11MCQCh. 3 - Prob. 12MCQCh. 3 - Prob. 13MCQCh. 3 - Prob. 14MCQCh. 3 - Prob. 15MCQCh. 3 - Prob. 16MCQCh. 3 - Prob. 17MCQCh. 3 - Prob. 18MCQCh. 3 - Prob. 19MCQCh. 3 - Prob. 20MCQCh. 3 - Prob. 21MCQCh. 3 - Prob. 22MCQCh. 3 - Prob. 23MCQCh. 3 - Stewie, a single taxpayer, operates an activity as...Ch. 3 - Prob. 2PCh. 3 - Lawrence owns a small candy store that sells one...Ch. 3 - Business with gross receipts of $25 million or...Ch. 3 - Teresa is a civil engineer who uses her automobile...Ch. 3 - Prob. 7PCh. 3 - Martha is a self-employed tax accountant who...Ch. 3 - Prob. 9PCh. 3 - Go to the U.S. General Services Administration...Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Marty is a sales consultant. Marty incurs the...Ch. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Cooper and Brandy are married and file a joint...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Cindy operates a computerized engineering drawing...Ch. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Lew is a practicing CPA who decides to raise...
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