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Tax - Intermediate Vehicle Expense [2019] _ 15 Ross is not great at keeping receipts and...

Tax - Intermediate Vehicle Expense [2019]
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15 Ross is not great at keeping receipts and records, but he managed to keep track of all of his mileage (23,973 total mileage and 19,433 business use) and about 60% of his receipts for gas, oil changes, repairs, and maintenance. His receipts total $5,832. His bill for insurance was $121 per month. His car, with a basis of $29,477, was brand new on January 1, 2018, when he put it in service. What can Ross use for vehicle expense for 2018?
A.- Ross can use SMR for an vehicle expense deduction of $10,591.
B.- Ross can only use actual expenses of $1,452, because that is the only receipt he can prove.
C.- Ross can estimate his actual expenses based on the receipts he has. If $5,832 equals 60%, then 100% would be $9,720.
D.- Ross can use 100% bonus depreciation of $23,876 for the business-use percentage of his car.
16 For qualifying property placed in service on or after September 27, 2017, how much bonus depreciation may a taxpayer claim?
A.- 50%.
B.- Taxpayers are required to claim 100% bonus depreciation on or after September 27, 2017.
C.- 100%.
D.- After September 27, 2017 bonus depreciation is 50% with an option to claim an extra 25%.
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Answer #1

Q No: 15

Section 179 talks about caluclating depreciation for cars.

This section allows, to fully deduct the cost of newely purchased business asset.

To avail under this section, the vehicle must put in use with in the same year and must be used for business use for atleast 50%

Section 179 deductions must not exceed the net income, if it does that can carryover as deduction to the new year.

In our case, Ross used car 19433 miles for business use out of total 23973 which amount to 81.06% and he put in use within the same year.

Since ross engaged in an income producing business, he can claim 100% of his vehicle cost adjusted for the business use rate.

So the right option is D

Q NO 16

The qualified property eligible for 100% bonus depreciation that is acqured and placed in service after Sept 27, 2017

So the right option is C

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