This addresses IRS mileage rates.
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Please see attachment. My question is why did he use those rates highlighted in red.
Margaret started her own business in the current year and will report a profit for her first year. Her results of operations are as follows:
Gross income $50,000
Travel $1,000
Transportation 6,173 miles, using standard mileage method
Entertainment in total $4,000
Seven gifts at $50 each $350
Rent and utilities for apartment in total $10,000
(20% is used for a home office)
What is the net income Margaret should show on her Schedule C? Show the calculation of her taxable business income.
Gross income $50,000
Expenses:
Travel $ 1,000
Transportation
3,115 miles x 50.5 cents $ 1,573
3,115 miles x 58.5 cents $ 1,822
Entertainment in total $4,000 x 50% $ 2,000
7 gifts at $50 each, limited to $25 $ 175
Rent and utilities allocated to home office $ 2,000
20% x $10,000
Total Expenses $ 8,570
Taxable Business Income $41,430
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The solution explains IRS mileage rates and how they are used.
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Your professor used those rates because this must be a problem from the year 2008 or the ...
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