Cassady, an employee of a law firm, maintains an office at the principal business location of her firm. She frequently travels directly from her home to client locations within and outside the metropolitan area. Cassady is not reimbursed for her transportation expenses and has incurred the following:
Transportation expenses associated with trips to clients within
the metropolitan area ………………………………….. $2,000
Transportation expenses associated with trips to clients located
outside the metropolitan area …………………………… 3,000
Total ……………………………………………………… $5,000
a. What is the amount of Cassady’s deduction for transportation expenses?
b. How is the deduction reported on Cassady’s tax return?
c. What is the amount of Cassady’s deduction for transportation expenses and its classification if she is self-employed and operates her office from her home? Assume that the requirements of Sec. 280A are satisfied.