Question

Suppose that while Melissa was on the coast, she also spent two days sightseeing the national parks in the area. To do the sightseeing, she paid $1,330 for transportation, $1,255 for lodging, and $280 for meals during this part of her trip, which she considers personal in nature. What amount of the total costs can Melissa deduct as business expenses?

Answer 1

Answer:

$1,300

Explanation:

Only the cost that are directly related to the business conference is to be deducted as Melissa's business tax. Sightseeing cost is therefore not part of her original plan. The business related cost are therefore;

• $400 for round-trip airfare to San Francisco
•  $250 fee to register for the conference,
•  $300 per night for three night’s lodging,
•  $200 for meals, and
•  $150 for cab fare.

A summation of this cost would give $1,300 as the amount of the total costs that can Melissa deduct as business expenses.

Answer 2

Answer:The business expenses $1,800, no expenses will be deducted for sightseeing since it is personal in nature, the expenses for sightseeing is $0

Explanation:

The amount deductible as business expense is

$400 for air fare

$250 to register

$300 per night for three days

=$300 × 3 = $900

$200 for meals

=$200 × 50% = 100

$150 for cab fee

= $400 +$250 + $900 + $100 +$150

=$1800

(b) Mellisa cannot deduct any expenses as total cost for the sightseeing since she consider this part of the trip as personal, since only expenses for business purposes is deductible. The expenses of sightseeing is $0. The main purpose for Mellisa traveling is for business therefore the $1,800 will only be deductible as business expense