Question

Kim works for a clothing manufacturer as a dress designer. During 2020, she travels to New York City to attend five days of fashion shows and then spends three days sightseeing. Her expenses are as follows:

Airfare	$2,300
Lodging (8 nights)	2,990
Meals (8 days)	2,760
Airport transportation	65

Assume lodging/meals are the same amount for the business and personal portion of the trip ($374 per day for lodging and $345 per day for meals).

If an amount is zero, enter "0". If required, round all interim calculations to nearest dollar.

a. Determine Kim's business expenses, presuming no reimbursement.

Airfare	$fill in the blank b18e94040049009_1
Lodging	fill in the blank b18e94040049009_2
Meals	fill in the blank b18e94040049009_3
Transportation	fill in the blank b18e94040049009_4
Total	$fill in the blank b18e94040049009_5

What amount may she deduct on her tax return?
$

b. Would the tax treatment of Kim's deduction differ if she was an independent contractor?

The deductible expenses would be $

Question 2

Stork Associates paid $77,400 for a 20-seat skybox at Veterans Stadium for eight professional football games. Regular seats to these games range from $65 to $195 each. At one game, an employee of Stork entertained 18 clients. Stork furnished food and beverages for the event at a cost of $3,600. The game was preceded by a bona fide business discussion, and all expenses are adequately substantiated.

How much may Stork deduct for this event?
$

Answer 1

a. Determine Kim's business expenses, presuming no reimbursement.
Airfare	$  2,300.00
Lodging (5 nights)=(374 x 5 nights)	$  1,870.00
Meals (5 days) ($345 x 5 days x 50% (cutback adjustment)	$     862.50
Transportation	$       65.00
Total	$  5,097.50
What amount may she deduct on her tax return?	$  5,097.50
No allocation of the airfare is necessary as the trip was within the United States. The business portion of the meals ($1725) is subject to the cutback adjustment
$
b. Would the tax treatment of Kim's deduction differ if she was an independent contractor?
The deductible expenses would be 5097.50 and the expenses would be classified as DEDUCTION FOR AGI