ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM | FREE SOLVED ANSWERS
Jordan has two jobs She works as a night auditor at the Moonlight Motel. When her shift at the motel is over, she works as a short-order cook at the Greasy Spoon Restaurant. On a typical day, she drives the following number of miles
Home to Moonlight Motel= 4
Moonlight Motel to Greasy Spoon Restaurant= 7
Greasy Spoon Restaurant to home= 12
How many miles would qualify as transportation expenses for tax purposes?
Jordan has two jobs She works as a night auditor at the Moonlight Motel. When her shift at the motel is over, she works as a short-order cook at the Greasy Spoon Restaurant. On a typical day, she drives the following number of miles
Home to Moonlight Motel= 4
Moonlight Motel to Greasy Spoon Restaurant= 7
Greasy Spoon Restaurant to home= 12
How many miles would qualify as transportation expenses for tax purposes?
Multiple Choice
a. 12
b. 4
c. 7
Step 1: Understand what qualifies as deductible transportation expenses.
Generally, transportation expenses between a taxpayer’s home and their regular place of work are considered personal commuting expenses and are not deductible for tax purposes. However, transportation expenses incurred between two different workplaces in the same day are typically deductible.
Step 2: Analyze Jordan’s daily commute.
Jordan drives from home to the Moonlight Motel (first job), then from the Moonlight Motel to the Greasy Spoon Restaurant (second job), and finally from the Greasy Spoon Restaurant back home.
- Home to Moonlight Motel: 4 miles (commuting, not deductible).
- Moonlight Motel to Greasy Spoon Restaurant: 7 miles (between two workplaces, deductible).
- Greasy Spoon Restaurant to home: 12 miles (commuting, not deductible).
Step 3: Identify the deductible miles.
Based on the principle that only travel between workplaces is deductible, the 7 miles driven from the Moonlight Motel to the Greasy Spoon Restaurant qualify as transportation expenses for tax purposes.
Answer: 7
ACCT M50 PRINCIPLES OF INCOME TAXATION PRACTICE EXAM FREE SOLVED ANSWERS