Carlotta pays $190 to fly from Santa Fe to Denver. She spends three days finalizing a contract with the management of El Rancho Restaurant for the delivery of green chili in the upcoming year. Because she finalized the contract, Carlotta spends two-days attending the National Western Stock Show. Hotel costs are $108 per night and meals are $22 per day. How much can Carlotta deduct as business expenses from her trip?

Question

Quizplus · Accepted Answer

Carlotta can deduct the cost of her flight ($190), hotel for five nights ($108 x 5 = $540), meals for five days ($22 x 5 = $110), and any other directly related business expenses. Therefore, the total deductible amount is $190 + $540 + $110 = $840. However, since Carlotta spent two days attending the National Western Stock Show, which is not directly related to her business contract with El Rancho Restaurant, only 60% of her hotel and meal expenses for those two days can be deducted (2/5 = 40% deduction for personal time, 1- 0.40 = 0.60 or 60% deduction for business time). The total deduction for those two days is $108 x 60% = $64.80 for the hotel and $22 x 60% = $13.20 for meals, so the total deduction for the trip is $840 - $64.80 - $13.20 = $762.

Carlotta Pays $190 to Fly from Santa Fe to Denver