Question

87. Eloise is a sales representative for a video production company. While at an exposition, she incurs $2,000 in entertainment expenses and $1,200 for meals. The expenses occur while she is discussing business and Eloise makes an adequate accounting to her employer and is reimbursed $1,200. How much may Eloise deduct if her AGI is $40,000? a. $- 0 - b. $1,200 for AGI and $200 from AGI. c. $1,200 for AGI and $2,000 from AGI. d. $- 0 - for AGI and $200 from AGI. e. $- 0 - for AGI and $1,000 from AGI. ANSWER:   b

88. 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: Transportation costs $1,000 Meals 700 Entertainment costs 500 Hotel costs 800 ​ 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, after limitations. ​ a. Only statement I is correct. b. Only statement II is correct. c. Both statements are correct. d. Neither statement is correct. ANSWER:   c The questions are from test bank 2016. With the current tax law, are these answers still correct?? I want to know the updated answers, thanks!

Answer 1

Both answers are correct as per current tax laws.

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