Question : 41. Barry a self-employed attorney who travels to New York a : 1313514

41. Barry is a self-employed attorney who travels to New York on a business trip during 2014. Barry’s expenses were as follows: 

Airfare$560

Taxis$ 40

Meals$200

Lodging$350

How much may Barry deduct as travel expenses for the trip?

a. $0

b. $950

c. $1,000

d. $1,050

e. None of the above

42. If an employer chooses a per diem method of substantiation for travel expenses,

a. The Regular Federal Rate method allows employees the same per diem rate no matter where they travel in the United States.

b. The high-low method averages the high-cost locality and low-cost locality per diem rates to arrive at an average rate.

c. The meals and incidental expenses method requires actual cost records to substantiate lodging expenses.

d. Actual expense records substantiating the business reason for the trip and the dates of arrival and departure are not required.

e. The employer need not use an accountable plan for reimbursing employees for travel expenses.

43. During 2014, Harry, a self-employed accountant, travels from Kansas City to Miami for a 1-week business trip. While in Miami, Harry decides to stay for an additional 5 days of vacation. Harry pays $600 for airfare, $200 for meals, and $500 for lodging while on business. The cost of meals and lodging while on vacation was $300 and $500, respectively. How much may Harry deduct as travel expenses for the trip?

a. $600

b. $1,100

c. $1,200

d. $1,300

e. None of the above

44. Which of the following items incurred while on travel is not considered a travel expense?

a. The cost of meals

b. The cost of lodging

c. Transportation costs

d. Cost of entertaining clients

e. None of the above

45. Taxpayers who make a combined business and pleasure trip:

a. Must allocate the travel cost between the business and pleasure parts of the trip if the travel is within the United States.

b. Must allocate the travel cost between the business and pleasure parts of the trip if the travel is outside the United States.

c. Can deduct the cost of meals, lodging, local transportation, and incidental expenses in full.

d. Can take a tax deduction only for the personal part of the trip.

46. Which of the following expenses, incurred while on travel, does not qualify as a travel expense?

a. Tips

b. Dry cleaning of suit

c. Dinner at a steak house

d. Gift purchased for a prospective customer ($20)

e. None of the above

47. Mikey is a self-employed computer game software designer. He takes a week-long trip to Maui, primarily for business. He takes 2 personal days at the beach. How should he treat the expenses related to this trip?

a. None of the expenses are deductible since there was an element of personal enjoyment in the trip.

b. 100 percent of the trip should be deducted as a business expense since the trip was primarily for business.

c. 50 percent of the trip should be deducted as a business expense.

d. The cost of all of the airfare and the expenses related to the business days should be deducted, while the expenses related to the personal days are not deductible.

48. If a per diem method is not used, which of the following items is not required as substantiation for the deduction of a travel expense?

a. Amount spent

b. Destination

c. Business reason for the trip

d. Departure and return dates

e. All of the above must be substantiated

49. Carlos drives to Oregon to consult with a client. He works for 1 day and spends 3 days enjoying Oregon since the consultation was right before a 3-day weekend. His expenses were $175 to drive to Oregon and back, $600 for lodging, $50 for food on the day that he worked, and $125 for food on the other 3 days. How much of his travel expenses are deductible?

a. $0

b. $175

c. $200

d. $350

e. $800

50. Gary is a self-employed accountant who pays $2,000 for business meals. How much of a deduction can he claim for the meals and where should the deduction be claimed?

a. 50 percent, miscellaneous itemized deduction

b. 50 percent, Schedule C deduction

c. 100 percent, miscellaneous itemized deduction

d. 100 percent, Schedule C deduction