What expenses are deductible when a taxpayer combines both business and personal activities on a trip?...

What expenses are deductible when a taxpayer combines both business and personal activities on a trip? How do the rules for international travel differ from the rules for domestic travel?

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Expert Solution

If the taxpayer has both business and personal motives for a trip, but the primary or dominant motive is business, the taxpayer may deduct the transportation costs to get to the place of business, but she may deduct only meals (50%), lodging, transportation on site, and incidental expenditures for the business portion of the travel.

If the taxpayer's primary purpose for the trip is personal, the taxpayer may not deduct transportation costs to travel to and from the location but the taxpayer may deduct meals (50%), lodging, transportation, and incidental expenditures for the business portion of the trip. For international travel in excess of one week, the taxpayer must allocate the cost of the transportation between personal (nondeductible) and business (deductible) activities.

Taxpayers generally determine the nondeductible portion of the transportation costs by multiplying the travel costs by a ratio of personal activity days to total days traveling. Finally, remember that travel days are considered business activity days for both domestic and international travel

ekkarill92 answered 1 year ago

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