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In 2010, RayeAnn acquires a car for $14,000. She uses the car in her advertising business and for personal purposes. Her records indicate the car is used 70% for busi- ness and that her total annual operating expenses, including depreciation, are $3,800.
a. How should RayeAnn treat the operating costs of the car for tax purposes?
b. In 2013, RayeAnn sells the car for $6,500. Her business use for 2011 through 2013 remains at 70%, and she properly deducted $5,880 in depreciation. What is her taxable gain or loss from the sale of the car?
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