Problem 3-8 Transportation (LO 3.3)

Teresa is a civil engineer who uses her automobile for business. Teresa drove her automobile a total of 14,800 miles during 2016, of which 75% was business mileage. The actual cost of gasoline, oil, depreciation, repairs, and insurance for the year was $7,832.

a. How much is Teresa's transportation deduction based on the standard mileage method?

$ _

b. How much is Teresa's transportation deduction based on the actual cost method?

$_

c. Which method should Teresa use to calculate her transportation deduction?