Question

During the year, Walt who is self-employed travels from Seattle to Tokyo, Japan, on business. His time was spent as follows: two days travel (one day each way), two days business, and two days personal. His expenses for the trip were as follows (meals and lodging reflect only the business portion): Airfare $3,000 Lodging 2,000 Meals 1,000 Presuming no reimbursement, Walt's deductible expenses are: a.$3,500. b.$6,000. c.$4,500. d.$5,500.

Answer 1

Answer:

d.$5,500.

Explanation:

The computation of the deductible expense is shown below:

= Airfare + lodging + 50% of meals

= $3,000 + $2,000 + 50% of $1,000

= $3,000 + $2,000 + $500

= $5,500

hence, the deductible expense is $5,500

Here we take 100% of airfare &  lodging but we took 50% for the meals

hence, the option d is correct