Question

Betty is a consultant and operates a sole proprietorship providing advisory services. In July of 2019, Betty traveled from Minneapolis to Munich, Germany to meet with a client. She spent a total of 15 days in Germany. 11 of the days were devoted to business (including travel days), holding meetings with her client and providing advisory services. Taking advantage of being abroad, Betty spent the other 4 days site seeing around Munich. Betty incurred the following expenses on her trip: • Airfare $1,900 • Hotel $2,100 ($140/night) • Meals $1,125 ($75/day) • Rental Car $450 ($30/Day) How much of the above expenses qualify as deductible travel expenses?

Answer 1

Answer:Total deductible expenses= 2695+1900=4595

All of airfare expense will be deductible as travel expense, whereas Hotel, Meals and car are on a per day basis so 11/15 of the costs will be deductible.

Explanation:

1) Airfare: All the cost of Airfare qualify as deductible travel expenses as she had to go and comeback as part of a business trip and her spending extra days in Munich don't affect the travel cost or airfare. So we can expense $1900.

2) Hotel, Meals and Rental car: All of these costs are related to the number of days that Betty spent in Munich so only 11 of the 15 days worth of cost can be expensed as deductible

(140+75+30)*(11)= 2695

Airfare              =1900

Total deductible expenses= 2695+1900=4595