Question

Hannah is the regional manager for a national chain of ice cream shops based out of Cedar City, Utah. When the company opens a new store in Coffee City, Texas, Hannah is given the task of supervising the initial operation. For three months, she works weekdays in Coffee City and returns home on weekends. She spends $950 returning to Cedar City but would have spent $820 had she stayed in Coffee City for the weekend. As to the weekend trips, how much of the costs, if any, qualifies as a deduction?

Answer 1

As per GAAP , the citizen is allowed deduction on travel and lodging whichever is required or needful for the employee and the business.

Here in this case, the employee returns home on weekends but could have stayed and saved some expenses so in this case the deduction allowed will be lower of the two following the expense should be for the benefit of the company.

So, the deduction allowed to the employee will be cost of lodging in weekend.

$820 as this the lower of the two options available for doing the business.