Alvin Is a Self-Employed Sound Technician Who Reports on the Cash

question 91

Essay

Alvin is a self-employed sound technician who reports on the cash method and calendar year. Alvin has a shop in Austin, Texas, but he spends much of his time away from his shop traveling to and from various concerts around the country. Alvin leases a truck to move his equipment around the country, and this year, he spent $12,000 in lease payments and paid $18,000 for gas, oil, and repairs. Alvin keeps records of his personal use of the truck and he estimates that 6,000 of the total 36,000 miles put on the truck this year were for personal trips. What amount of these expenses may Alvin deduct as business expenses?

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Definitions:

Disability

A physical or mental condition that significantly restricts one's ability to perform one or more major life activities.

Life Insurance

A contract between a policy owner and an insurance company that requires the insurance company to pay a designated beneficiary a sum of money upon the occurrence of the insured’s death.

Commercial General Liability

Insurance coverage that protects businesses against claims of bodily injury, property damage, and personal and advertising injury that may arise from its operations.

Intentional Wrongful Acts

Deliberate actions that are illegal or morally incorrect, committed with the understanding or awareness that they are wrong.