Richard traveled from New Orleans to New York for both business and vacation. He
ID: 2581717 • Letter: R
Question
Richard traveled from New Orleans to New York for both business and vacation. He spent 4 days conducting business and some days vacationing. He incurred the following expenses:
Airfare $460
Lodging- per day 175
Meals-per day 100
Business Entertainment 800
What is his miscellaneous itemized deduction (before the floor), assuming Richard is an employee and is not reimbursed, under the following two circumstances?
a. He spends three days on vacation, in addition to the business days.
b. He spends six days on vacation, in addition to the business days
Explanation / Answer
Note : In the present case where Richard spends three days on vacation, in addition to the business daysspends three days on vacation, in addition to the 4 business days (condition a), It will be considered that he traveled for primarly bussiness trip
Where as , when he spends six days on vacation, in addition to the 4 business days (condition b), It will be considered that he traveled for primarly personal trip.
For Airfair expense is fully deductible in case of primarly bussiness trip & no deduction in case of primarly personal trip.
For Lodging we get deductions on expense incurred for days spent on conducting business irrepective of kind of trips.
For meals we get deductions on 50 % of expense incurred for days spent on conducting business for both kind of trips.
For Business Entertainment deduction is available at 50 % of such expenses irrepective of kind of trips.
Richard 's miscellaneous itemized deduction (before the floor) for the two circumstances
a. Primarly bussiness trip b. Primarly personal trip Airfare $460 0 Lodging : $175 *4 days $700 $700 Meals : $100 *4 days *50 % $200 $200 Business Entertainment : $800 *50 % $400 $400 Miscellaneous itemized deduction $1,760 $1,300Related Questions
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