During the year, Sophie (a self-employed marketing consultant) went from Omaha to Lima, Peru, on business. She spent four days on business, two days on travel, and four days on vacation. Disregarding the vacation costs, Sophie's expenses are: $$\begin{array} { l r }
\text { Airfare } & \$ 3,000 \
\text { Lodging } & 800 \
\text { Meals } & 600 \
\text { Entertainment } & 400
\end{array}$$ Sophie's deductible expenses are:
A) $4,300.
B) $2,900.
C) $2,800.
D) $2,500.
E) None of these.

Question

During the year, Sophie (a self-employed marketing consultant) went from Omaha to Lima, Peru, on business. She spent four days on business, two days on travel, and four days on vacation. Disregarding the vacation costs, Sophie's expenses are: $$\begin{array} { l r } 
\text { Airfare } & \$ 3,000 \
\text { Lodging } & 800 \
\text { Meals } & 600 \
\text { Entertainment } & 400
\end{array}$$ Sophie's deductible expenses are:
A) $4,300.
B) $2,900.
C) $2,800.
D) $2,500.
E) None of these.

Quizplus · Accepted Answer

Sophie's deductible expenses include the airfare ($3,000), lodging for the business days ($800), and meals for the business days ($600). Entertainment expenses are typically not deductible for tax purposes. However, since the trip is international and the primary reason for the trip is business, the full cost of the airfare is deductible. The lodging and meals are only deductible for the days spent on business activities. Assuming the lodging and meal expenses are evenly distributed across all days (business, travel, and vacation), the calculation for deductible lodging and meals would need to account for the days not related to vacation. Since she spent 4 days on business and 2 days on travel (which are usually considered as part of the business expense), the vacation days do not count towards deductible expenses. Therefore, the correct calculation would exclude the entertainment and only include the airfare, lodging, and meals for the business and travel days, leading to the correct answer without needing to proportionally adjust for the vacation days since the primary reason for the trip allows for the inclusion of airfare, and the specific breakdown for lodging and meals is not provided, implying a full deduction of these expenses for the business portion of the trip.

During the Year, Sophie (A Self-Employed Marketing Consultant) Went from Omaha