PLEASE ANSWER A, B AND C On thursday, Justin flies from Balimore (his home offic
ID: 2518549 • Letter: P
Question
PLEASE ANSWER A, B AND C
On thursday, Justin flies from Balimore (his home office) to Cadiz (Spain). He conducts business on Friday and Tuesday; vacations on Satuarday, Sunday, and Monday ( a legal holiday in Spain); and returns to Baltimore on Thursday. Justin was schdualed to return home on Wednesday, but all flights were canceled due to bad weather. Therefore, he spent Wednesday watching floor shows at a local casino.
a) For tax purposes, what portion of Justin's trip regarded as being for business?
b) Suppose Monday was not a legal holiday. Would this change your answer in part (a) ? Explain?
c) Under either part (a) or (b), how much of Justin's airfare qualifies as a deducible business expense?
Explanation / Answer
a)If you have been living in Spain for six months (183 days) or more of the calendar year (not necessarily consecutively) or you have your main ‘vital’ interests in Spain (for example, your family or business is in Spain), then you are classed as a Spanish resident for tax purposes, as per spain Tax Rules. Here Justin is having Vitail interest, i.e. business in spain , so all the days he spent in spain doing business or otherwise makes him liable to pay tax. Though two days are considered for doing business but the residential status is determined based on the individual's total physical stay in Spain during the relevant tax year.
b) Yes the total days of his stay for business purpose would have increased but it would have no effect on his tax status.
c) Justin airfare and business related expenses for Thursday, Friday& Tuesday , also wednesday will be considered due to bad weather. But vacation days will not be considered.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.