Fred's employer dispatched him on a business trip from the Dallas headquarters to New York this year. During the trip Fred incurred the following expenses: $$\begin{array} { l r }
\text { Air fare } & \$ 1,300 \
\text { Lodging } & 750 \
\text { Meals } & 600 \
\text { Cab fare } & 220
\end{array}$$ What is the amount of Fred's deduction before the application of any AGI limitations?
A) $2,870
B) $2,570
C) $2,050
D) $1,300
E) $0 - the expenses cannot be deducted unless Fred is reimbursed.

Question

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York this year. During the trip Fred incurred the following expenses: $$\begin{array} { l r } 
\text { Air fare } & \$ 1,300 \
\text { Lodging } & 750 \
\text { Meals } & 600 \
\text { Cab fare } & 220
\end{array}$$ What is the amount of Fred's deduction before the application of any AGI limitations?
A) $2,870
B) $2,570
C) $2,050
D) $1,300
E) $0 - the expenses cannot be deducted unless Fred is reimbursed.

Quizplus · Accepted Answer

Fred can deduct all ordinary and necessary business expenses incurred during the trip, except for meals which are subject to a 50% limitation. Therefore, the deduction is $1,300 (Air fare) + $750 (Lodging) + $300 (50% of Meals) + $220 (Cab fare) = $2,570.

Fred's Employer Dispatched Him on a Business Trip from the Dallas