Question

Follow 2018 rule Question: Danny owns an electronics outlet in Dallas. This year he paid $600 to register for a four-day course in management in Chicago. Danny paid $800 in airfare and $1,000 for five nights lodging. After the course, Danny spent the last day sightseeing. During the trip, Danny also paid $140 a day for meals and $80 a day for a rental car. What amount of these travel expenditures may Danny deduct as business expenses?

an example from the book is: Rick paid a $300 registration fee for a three-day course in landscape design. The course was held in upstate New York (Rick paid $700 for airfare to attend) and he spent four days away from home. He spent the last day sightseeing. During the trip, Rick paid $150 a night for three nights’ lodging, $50 a day for meals, and $70 a day for a rental car. What amount of these travel-related expenditures may Rick deduct as business expenses? Page 9-10 Answer: $1,435 for business travel and $300 for business education. The primary purpose for the trip appears to be business because Rick spent three days on business activities versus one day on personal activities. He can deduct travel costs, computed as follows: Deductible Travel Costs Description Amount Explanation Airfare $ 700 Primary purpose is business Lodging 450 3 business days × $150 a day Meals 75 3 business days × $50 a day × 50% limit Rental car 210 3 business days × $70 a day Total business travel expenses $1,435

Answer 1

Ans- Danny can deduct business expenses as follows:

Deductible Travel Cost:-

Description	Amount
Registration fee	$600
Airfare	$800
Primary purpose is business lodging (4 business day *$200)	$800
Meals (4 business days*$140a day *50%)	$280
Rental car (4 business days *$80 a day)	$320
Total business expenses	$2,800

Note: The trip is primarily for business so the airfare is completely deductible. Only four days cost can be deductible for the lodging, half the meals and auto rental.

Hence Danny's total deductible travel cost is $2,800 in which $2,200 for business travel and $600 for business education.

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