Alfred Uses His Personal Automobile in His Business of Selling

question 110

Multiple Choice

Alfred uses his personal automobile in his business of selling party supplies to local businesses.He bought a new car in 2013 and drove it a total of 20,000 miles of which 2,000 miles were for commuting and other personal uses.Actual gas,oil,repairs,licensing,insurance,and depreciation totaled $11,000 for 2013.Actual parking expenses for business were $200.What is the maximum amount Alfred can deduct for 2013?

• A)$ 9,750
• B)$10,100
• C)$10,170
• D)$10.370
• E)$11,200

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Definitions:

Real Rate

The interest rate that has been adjusted for inflation, reflecting the real cost of borrowing or the real yield on an investment.

Inflationary Premium

A component of the money interest rate that reflects compensation to the lender for the expected decrease, due to inflation, in the purchasing power of the principal and interest during the course of the loan. It is determined by the expected rate of future inflation.

Consume Goods

The act of using up goods and services for personal needs or consumption.

Save Money

The practice of reducing expenditures or setting aside funds to increase financial security or for future use.