Question

Melissa recently paid $625 for round-trip airfare to San Francisco to attend a business conference for three days. Melissa also paid the following expenses: $725 fee to register for the conference, $415 per night for three nights’ lodging, $205 for meals, and $395 for cab fare. (Leave no answers blank. Enter zero if applicable.) (Round your answer to the nearest dollar amount.)

a. What amount of the travel costs can Melissa deduct as business expenses?

b. Suppose that while Melissa was on the coast, she also spent two days sightseeing the national parks in the area. To do the sightseeing, she paid $1,590 for transportation, $880 for lodging, and $390 for meals during this part of her trip, which she considers personal in nature. What amount of the travel costs can Melissa deduct as business expenses?

c. Suppose that Melissa made the trip to San Francisco primarily to visit the national parks and only attended the business conference as an incidental benefit of being present on the coast at that time. What amount of the airfare can Melissa deduct as a business expense?

d. Suppose that Melissa’s permanent residence and business was located in San Francisco. She attended the conference in San Francisco and paid $725 for the registration fee. She drove 105 miles over the course of three days and paid $169 for parking at the conference hotel. In addition, she spent $295 for breakfast and dinner over the three days of the conference. She bought breakfast on the way to the conference hotel and she bought dinner on her way home each night from the conference. What amount of the travel costs can Melissa deduct as business expenses? (Use standard mileage rate. Do not round intermediate calculations. Round your final answer to the nearest dollar amount.)

Answer 1

a). Since business was the primary reason for the trip, Melissa can deduct $3,092.50 of travel costs [$725 registration + $625 + $1,245 + (50%*$205) + $395]

b). None of the costs of sightseeingis deductible. However, because her primary purpose for the trip appears to be business (3 days business vs. 2 days personal) she is allowed to deduct her airfare to San Francisco and her other expenses in part a. relating to the business portion of the trip. Melissa can deduct $3,092.50

c). If the purpose of the trip is primarily personal, then none of the air fare is deductible and only those direct costs associated with the conference ($2,467.50) can be deducted (the registration, lodging, 50 percent of the meals, and cab fare).

d). Melissa would be allowed to deduct the registration fee for the conference of $725 and she could deduct 54.5 cents per mile for the 105 miles she drove to and from the conference ($57.225) and the parking fee of $169. However, because her travel did not require her to be away from home overnight, she is not allowed to deduct the cost of her meals going to and coming from the conference each day.So, melissa can deduct $951.225