Final answer:
The situation most likely to be eligible for automatic mileage deductions is one of seven cars used to deliver pizzas, as it can be used exclusively for business purposes. A limousine rented out for special occasions could potentially qualify if used solely for business. However, a car owned by the taxpayer's mother or one on which MACRS has been claimed would not qualify for automatic mileage deductions.
Step-by-step explanation:
The student is asking about the situations in which automatic mileage deductions can be claimed for tax purposes. The automatic mileage deduction is typically used for business-related vehicle expenses, calculated based on the standard mileage rate set by the IRS each year. However, certain conditions must be met for a taxpayer to utilize this method.
- a. A limousine rented out for special occasions may possibly be eligible for automatic mileage deductions if it is used exclusively for business and proper logs are maintained. However, it must not be rented with a driver for it to qualify.
- b. If the auto belongs to the taxpayer's mother and is used for personal reasons, it would not be eligible for mileage deductions.
- c. One of seven cars used to deliver pizzas could be eligible for automatic mileage deductions if it is used exclusively for business and proper documentation of the mileage for business purposes is kept.
- d. If the taxpayer has claimed MACRS statutory percentage method on the automobile, they cannot also claim the standard mileage rate deductions.
Therefore, based on the information provided, the car used to deliver pizzas (c) is likely the only situation where automatic mileage might be available.