Brees Co. requires its employees to adequately account for all reimbursed business expenses. Tracy, an employee of Brees Co. has AGI of $50,000 and submitted for reimbursement the following valid business expenses:
?
$$\begin{array} { l r }
\text { Transportation costs } & \$ 1,000 \
\text { Meals } & 700 \
\text { Hotel costs } & \$ 1,300
\end{array}$$
What are the tax consequences if Brees reimburses Tracy $2,400?
I.Tracy must report $2,400 of income.
II.Tracy can deduct $2,400 of the expenses for AGI and $-0- as miscellaneous itemized deductions.
?

Question

Brees Co. requires its employees to adequately account for all reimbursed business expenses. Tracy, an employee of Brees Co. has AGI of $50,000 and submitted for reimbursement the following valid business expenses:
?
$$\begin{array} { l r } 
\text { Transportation costs } & \$ 1,000 \
\text { Meals } & 700 \
\text { Hotel costs } & \$ 1,300
\end{array}$$
What are the tax consequences if Brees reimburses Tracy $2,400?
I.Tracy must report $2,400 of income.
II.Tracy can deduct $2,400 of the expenses for AGI and $-0- as miscellaneous itemized deductions.
?

Quizplus · Accepted Answer

The Answer of Brees Co. requires its employees to adequately account for all reimbursed business expenses. Tracy, an employee of Brees Co. has AGI of $50,000 and submitted for reimbursement the following valid business expenses:
?
$$\begin{array} { l r } 
\text { Transportation costs } & \$ 1,000 \
\text { Meals } & 700 \
\text { Hotel costs } & \$ 1,300
\end{array}$$
What are the tax consequences if Brees reimburses Tracy $2,400?
I.Tracy must report $2,400 of income.
II.Tracy can deduct $2,400 of the expenses for AGI and $-0- as miscellaneous itemized deductions.
?

Brees Co Requires Its Employees to Adequately Account for All Reimbursed