Charlie works for a bricklaying company and uses his own car to travel to various building sites
Question:
Charlie works for a bricklaying company and uses his own car to travel to various building sites throughout the day. He oversees all the building sites to make sure the sites have enough materials such as bricks, sand and cement. He counts remaining stock and estimates for the next order before travelling to the next site.
Charlie acquired his car on 1 November 2021 for $68,000. The acquisition cost was funded entirely by a loan at an interest rate of 13%. Charlie incurred the following expenses during the year and has retained all tax invoices:
- Registration and insurance = $1,800;
- Repairs and maintenance = $1,500; and
- Oil and fuel costs = $2,000.
For the period 1 November 2021 to 30 June 2022, Charlie estimates that the car travelled a total of 25,000 kilometres, 20,000 of which were for business purposes. You may assume that Charlie has maintained all necessary records and a logbook.
The ATO has assessed the effective life of motor vehicles to be 8 years.
Required: Calculate Charlie's deduction for car expenses. Charlie wishes to claim the highest possible deduction.
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold