Question

Melissa recently paid $610 for round-trip airfare to San Francisco to attend a business conference for three days. Melissa also paid the following expenses: $385 fee to register for the conference, $335 per night for three nights’ lodging, $300 for meals, and $175 for cab fare.

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 $1,660 for transportation, $910 for lodging, and $375 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’s permanent residence and business was located in San Francisco. She attended the conference in San Francisco and paid $385 for the registration fee. She drove 75 miles over the course of three days and paid $170 for parking at the conference hotel. In addition, she spent $475 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 these costs can Melissa deduct as business expenses?

Answer 1

a.         Since business was the primary reason for the trip, Melissa can deduct $2,325 of travel costs [$385 registration + $610 + $1005+ (50%*$300) + $175]

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.

C. Melissa would be allowed to deduct the registration fee for the conference of $385 and she could deduct $56 for the 75 miles she drove to and from the conference (56 cents per mile x 75 miles) and the parking fee of $170. 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.