In Choosing Between the Actual Expense Method and the Automatic

question 13

True/False

In choosing between the actual expense method and the automatic mileage method, a taxpayer should consider the cost of insurance on the automobile.

---

Definitions:

Flotation Costs

Expenses incurred by a company when it issues new securities, including underwriting fees and legal expenses.

Cash Dividends

Profits given to stockholders by a corporation, typically as a way to distribute earnings.

New Shares

Additional stock issued by a company, potentially diluting the ownership percentage of existing shareholders.

Dividend Income

Earnings obtained by holding company shares, typically dispensed from the firm's earnings.