Question

During the year, John (a self-employed management consultant) went from Milwaukee to Hawaii on business. Preceding a five-day business meeting, he spent four days vacationing at the beach. Excluding the vacation costs, his expenses for the trip are:
Airfare $3,200
Lodging 900
Meals 800
Entertainment 600 ​
Presuming no reimbursement, deductible expenses are:_______
A) $3,200.
B) $3,900.
C) $4,500.
D) $5,500.
E) None of these.

Answer 1

Answer:

$4,500

Explanation:

Following the IRS guidelines, we can deduct the following expenses:

• Air fare $3,200 (100% of actual expenses)
• Meals $400 (= $800 x 50%; deductions for meals are only 50% of the unreimbursed cost)
• Lodging $900 (100% of actual expenses)

The total deductible expenses are $3,200 + $400 + $900 = $4,500