On the first of each month, Donna's employer gives her $500 to cover her work-related car expenses. The employer does not require Donna to report her...

On the first of each month, Donna's employer gives her $500 to cover her work-related car expenses. The employer does not require Donna to report her actual costs. During the year, Donna can substantiate driving 24,000 work-related miles. Which of the following describes the correct tax treatment of Donna's car expenses and reimbursement? Question options: 1)