,ACCESS Test Bank for McGraw Hill's Taxation of Business Entities 2023 Editio
m m m m m m m m m m m
n 14th Edition Spilker
m m m
SolutionsmManual—TaxationmofmBusinessmEntities,mbymSpilkerm et mal.
Chapter 1 Busi m m
ness Income, Deductions, and Accounting Methods
m m m m m
SOLUTIONS MANUAL m
Discussion Questions m
1. [LO m1]mWhat mismanm“ordinarymand mnecessary”mbusinessmexpenditure?
“Ordinary”mandm“necessary”mimplymthatmanmexpensemmustmbemcustomarymandmhelpful,mresp
ectively.mBecausemthesemtermsmaremsubjective,mthem testsmaremambiguous.mHowever,mordinarym
isminterpretedmbymthemcourtsmasmincludingmexpensesmwhichmmaymbemunusualmformamspecificmta
xpayerm(butmnotmunusualmformthatmtypemofmbusiness)mandmnecessarymismnotminterpretedmasmonl
ymessentialmexpenses.mThesemlimitsmcanmbemcontrastedmwithmthemreasonablemlimitmonmamounts
mandmthembonamfidemrequirementmformprofitmmotivation.
2. [LO m1]mExplainmhowmcost mof mgoodsmismtreated mwhenmambusinessmsellsminventory.
Undermthemreturnmofmcapitalmprinciple,mcostmofmgoodsmsoldmrepresentsmamreductionminmgrossmi
ncomemrathermthanmambusinessmexpense.mFormexample,mifmamtaxpayermsellsminventorymfor
$100,000mandmreportsmamcostmofmgoodsmsoldmofm$40,000,mthembusiness’smgrossmincomemis
$60,000m($100,000m–m40,000)mnotm$100,000.
3. [LO m1]mWhethermambusinessmexpensemism“reasonableminmamount”mismoftenmamdifficult mquesti
on.mExplainmwhymdeterminingmreasonablenessmismdifficult mand mdescribemamcircumstancemwh
eremreasonablenessmismlikelymtombemquestioned mbymthemIRS.
Reasonablenessmismanmissuemofmfactmandmcircumstance,mandmextravagancem ismdifficultm tomdete
rminembecausemofmthemsubjectivitymandmmultitudemofm factorsminvolvedminmdeterminingmprice.m
Reasonablenessmismmostmlikelymtombemanmissuemwhenmampaymentmismmademtomamrelatedmindivid
ualmormthemtaxpayermenjoysmsomempersonalmbenefitmincidentalmtom themexpenditure.
4. [LO m1]mJakemismamprofessionalmdogmtrainermwhompurchasesmand mtrainsmdogsmformusembymlaw
menforcement magencies.mLast myearmJakempurchased m500mbagsmof mdogmfood mfrommamlargempe
t mfood mcompanymat manmaveragemcost mof m$30mpermbag.mThismyear,mhowever,mJakempurchased m
500mbagsmof mdogmfood mfrommamlocalmpet mfoodmcompanymat manmaveragemcost mof m$45mpermbag
.mUndermwhat mcircumstancesmwould mthemIRSmlikelymchallengemthemcost mof mJake’smdogmfoo
d masmunreasonable?
Amcommonmtestmformreasonablenessmismwhethermthemexpendituremismcomparablem tomanmarm'sml
engthmamountm–
mampricemchargedmbymobjectivem(unrelated)mindividualsmwhomdomnotmreceivemanymincidentalmp
ersonalmbenefits.mHence,mthemIRSmismmostmlikelymtomchallengemthemcostmofmthemdogmfoodmifmJak
e’smrelativesmcontrolmormownmthemlocalmpetmfoodmcompanymandmwasmbenefitingmfrom mthemincre
asedmprice.
©mMcGrawmHillmLLC.mAllmrightsmreserved.mNomreproduction mormdistributionmwithoutmthemprior mwrittenmconsentmofmMcGrawmHillmLLC.
1
mynursytest.store
,ACCESS Test Bank for McGraw Hill's Taxation of Business Entities 2023 Editio
m m m m m m m m m m m
n 14th Edition Spilker
m m m
SolutionsmManual—TaxationmofmBusinessmEntities,mbymSpilkerm et mal.
5. [LO m2]mWhat mkindsmof mdeductionsmaremprohibited masmammattermof mpublicmpolicy?mWhymmig
ht mCongressmdeemmit mimportant mtomdisallow mdeductionsmformexpendituresmthat maremagainst mp
ublicmpolicy?
ThemCodemlistsmbribes,mkickbacks,mandm“other”millegalmpaymentsmasmnondeductible.mCongre
ssmdidn’tmwantmthemtaxmbenefitsmassociatedmwithmdeductionsmtombenefitmorm subsidizemwrongdo
ing.mOfmcourse,mthismrationalemdoesn’tmreallymexplainm themprohibitionmagainstmdeductingmpol
iticalmcontributionsmwhichmismprobablymbettermexplainedmbym thempotentialmperceptionmthatmpo
liticalmeffortsmarembeingmsubsidizedmbymtaxpayers.
6. [LO m2]mProvidemanmexamplemof manmexpensemassociated mwithmthemproductionmof mtax-
exempt mincome,mand mexplainmwhat mmight mhappenmif mCongressmrepealed mthemprohibitionm
against mdeductingmexpensesmincurred mtomproducemtax-exempt mincome.
Twomcommonmexamplesmareminterestmexpensemassociatedmwithmdebtmusedmtompurchasemmuni
cipalmbondsmandmlifeminsurancempremiumsmpaidmonmkeymmanminsurance.mIfmthismprohibitionm
weremrepealed,mthenmtaxpayersmwouldmhavemanmincentivemtomborrowmtominvestminmmunicipalm
bondsmormborrowmtominvestminmemployeemlifeminsurance.mThismformermpracticemwouldm leadmto
mhighermdemandmformmunicipalmbondsm(lessmyield)mandmlessmrevenuemformthemgovernment.mTh
emlattermpracticemwouldmleadmtomhighermdemandmforminsurancem(highermpremiums?)mandmles
smrevenuemformthemgovernment.mBothmpracticesmcouldmleadmtomamperceptionmofminequitymbetw
eenmthosemtaxpayersmablemtomutilizemthemtaxmarbitragemtomreducemtaxesmandmthosemwhomcould
mnotmusemthempractice.
7. [LO m2]m{Research}mPeggymismamrodeomclown,mand mthismyearmshemexpended m$1,000monmspec
ialm“funny”mclothesmand moutfits.mPeggymwould mlikemtomdeductmthemcostmof mthesemclothesmasm
work-
mrelated mbecausemshemrefusesmtomwearmthemclothesmunlessmshemismworking.mUndermwhat mcirc
umstancesmcanmPeggymdeduct mthemcost mof mhermclownmclothes?
Taxpayersmmaymdeductmthemcostmofmuniformsmormspecialmclothingmtheymuseminmtheirmbusinessm
whenmthemclothingmismnotmappropriatemtomwearmasmordinarymclothingmoutsidemthemplacemofmbu
siness.mInmPeggy’smcase,mthemclownmclothesmaremanalogousmtomspecialmuniformsmormprotectiv
emgarmentsmandmcouldmbemdeductible.mSeemD.mTechner,mTCmMemom1997-
498.mErhardmSeminarmTraining,mTCmMemom1986-
526mprovidesmanmexamplemofmclothesmthatmweremnotmdeductiblembecausemtheymweremappropri
atemformnormalmwear.mHowever,mthemcostmofmclothingmwouldmnotmlikelymbemdeductiblemifmthemc
lothesmweremunacceptablemsolelymbecausemofmthemtaxpayer’smsensemofmfashion.
8. [LO m2]mJimmymismamsolemproprietormof mamsmallmdry-
cleaningmbusiness.mThismmonthmJimmympaid mformhismgroceriesmbymwritingmchecksmfrommt
hemcheckingmaccount mdedicated mtomthemdry-
mcleaningmbusiness.mWhymdomyoumsupposemJimmym ismusingmhismbusinessmcheckingmaccou
nt mrathermthanmhismpersonalmcheckingmaccount mtompaymformpersonalmexpenditures?
Jimmymmightmbemtryingmtomreducemhismbankmchargesmbymusingmonemaccountmformbothmpersona
lmandmbusinessmexpenditures,mbutmhemcouldmalsombemtryingmtomdisguisempersonalmexpenditures
mas
©mMcGrawmHillmLLC.mAllmrightsmreserved.mNomreproduction mormdistributionmwithoutmthemprior mwrittenmconsentmofmMcGrawmHillmLLC.
2
mynursytest.store
, ACCESS Test Bank for McGraw Hill's Taxation of Business Entities 2023 Editio
m m m m m m m m m m m
n 14th Edition Spilker m m m
SolutionsmManual—TaxationmofmBusinessmEntities,mbymSpilkerm et mal.
businessmexpenses.mBymcomminglingmbusinessmandmpersonalmexpenditures,mJimmymwillmneed
mtomseparatempersonalmandmbusinessmexpendituresmbeforemclaimingmanymbusinessmdeductions
.
9. [LO m2]mTroymoperatesmanmeditorialmservicemthat moftenmentertainsmprospectivemauthorsmtomenc
ouragemthemmtomusemTroy'smservice.mThismyearm Troympaid m$3,000mformthemcost mof mmealsmand
$6,200mformthemcost mof mentertainingmauthors.mDescribemthemconditionsmundermwhichmTroymca
nmdeduct mamportionmof mthemcost mof mthemmealsmasmambusinessmexpense.
Tomdeductm100mpercentmofmthemcostmofmmealsmasmambusinessmexpense,mthemmealsmmustmbemordi
narymandmnecessarymtomTroy’smbusiness,mprovidedmbymamrestaurant,mandmthemamountmmustmbe
mreasonablemundermthemcircumstances.mInmaddition,mTroymormanmemployeemmustmbempresentm
whenmthemmealmismfurnished,mandmthemmealmmustmbemfurnishedmtomanmactualmormpotentialmbusi
nessmassociate.mFinally,mthemcostmofmthemmealsmmustmbemseparatelymstatedm(byminvoice)mfromm
themcostmofmthementertainmentm(themcostmofmthementertainmentmismnotmdeductible).mIfm themmeals
mandmbeveragesmaremnotmprovidedmbymamrestaurant,mthenmonlym50mpercentmismdeductiblem(assu
mingmallmofmthemothermrequirementsmaremmet).
10. [LO m2]mSusmitampurchased mamcarmthismyearmand musesmit mformbothmbusinessmand mpersonalm
purposes.mSusmitamdrovemthemcarm11,000mmilesmonmbusinessmtripsmand m9,000mmilesmformp
ersonalmtransportation.mDescribemhow mSusmitamwillmdeterminemthemamount mof mdeductibl
emexpensesmassociated mwithmthemauto.
Becausemonlymthemexpensemrelatingmtombusinessmusemismdeductible,mthemtaxpayermmustmallocat
emthemexpensesmbetweenmthembusinessmandmpersonalmusemportions.mAmcommonmmethodmofmall
ocationmismrelativemuse.mInmthisminstance,mSusmitamwouldmcalculatemthembusinessmportionmbas
edmuponmthemratiomofmbusinessmmilesmtomtotalmmilesm(11/20morm55mpercent).mShemwouldmthenmd
eductmthemcostsmofmoperatingmthemvehiclemformbusinessmpurposesmplusmdepreciationmonmthembu
sinessmportionm(55mpercent)mofmthemvehicle’smtaxmbasis.mAlternatively,m inmlieumofmdeductingmth
esemcosts,mSusmitammaymelectmtomdeductmamstandardmamountmformeachmbusinessmmilemshemdriv
es.mThemstandardmmileagemratem(58.5mcentsmpermmilemformthemfirstmsixmmonthsmofm2022mandm6
2.6mcentsmformthemfinalmsixmmonths)mrepresentsmthemper-
milemcostmofmoperatingmanmautomobilem(includingmdepreciationmormleasempayments).mOncemS
usmitamhasmmademthismelection,mshemmustmcontinuemtomusemitmthroughoutmthemlifemofm themauto.
11. [LO m1,mLOm2]mWhat mexpensesmare mdeductiblemwhenmamtaxpayermcombinesmbothmbusiness ma
nd mpersonalmactivitiesmonmamtrip?mHow mdomthemrulesmforminternationalmtravelmdiffermfrommthe
mrulesmformdomesticmtravel?
Ifmthemtaxpayermhasmbothmbusinessmandmpersonalmmotivesmformamtrip,mbutm themprimarymormdo
minantmmotivemismbusiness,mthemtaxpayermmaymdeductmthemtransportationmcostsmtomgetmtomthem
placemofmbusiness,mbutmshemmaymdeductmonlymmealsm(50%morm100%mifmprovidedmbymamrestaur
ant),mlodging,mtransportationmonmsite,mandmincidentalmexpendituresmform thembusinessmportion
mofmthemtravel.mIfmthemtaxpayer’smprimarympurposemform themtripmismpersonal,mthem taxpayermma
ymnotmdeductmtransportationmcostsmtomtravelm tomandmfrom mthemlocation,mbutmthemtaxpayermma
ymdeductmmealsm(50%morm100%mifmprovidedmbymamrestaurant),mlodging,mtransportation,mandm
incidentalmexpendituresmformthembusinessmportionmofmthemtrip.mFor
©mMcGrawmHillmLLC.mAllmrightsmreserved.mNomreproduction mormdistributionmwithoutmthemprior mwrittenmconsentmofmMcGrawmHillmLLC.
3
mynursytest.store
m m m m m m m m m m m
n 14th Edition Spilker
m m m
SolutionsmManual—TaxationmofmBusinessmEntities,mbymSpilkerm et mal.
Chapter 1 Busi m m
ness Income, Deductions, and Accounting Methods
m m m m m
SOLUTIONS MANUAL m
Discussion Questions m
1. [LO m1]mWhat mismanm“ordinarymand mnecessary”mbusinessmexpenditure?
“Ordinary”mandm“necessary”mimplymthatmanmexpensemmustmbemcustomarymandmhelpful,mresp
ectively.mBecausemthesemtermsmaremsubjective,mthem testsmaremambiguous.mHowever,mordinarym
isminterpretedmbymthemcourtsmasmincludingmexpensesmwhichmmaymbemunusualmformamspecificmta
xpayerm(butmnotmunusualmformthatmtypemofmbusiness)mandmnecessarymismnotminterpretedmasmonl
ymessentialmexpenses.mThesemlimitsmcanmbemcontrastedmwithmthemreasonablemlimitmonmamounts
mandmthembonamfidemrequirementmformprofitmmotivation.
2. [LO m1]mExplainmhowmcost mof mgoodsmismtreated mwhenmambusinessmsellsminventory.
Undermthemreturnmofmcapitalmprinciple,mcostmofmgoodsmsoldmrepresentsmamreductionminmgrossmi
ncomemrathermthanmambusinessmexpense.mFormexample,mifmamtaxpayermsellsminventorymfor
$100,000mandmreportsmamcostmofmgoodsmsoldmofm$40,000,mthembusiness’smgrossmincomemis
$60,000m($100,000m–m40,000)mnotm$100,000.
3. [LO m1]mWhethermambusinessmexpensemism“reasonableminmamount”mismoftenmamdifficult mquesti
on.mExplainmwhymdeterminingmreasonablenessmismdifficult mand mdescribemamcircumstancemwh
eremreasonablenessmismlikelymtombemquestioned mbymthemIRS.
Reasonablenessmismanmissuemofmfactmandmcircumstance,mandmextravagancem ismdifficultm tomdete
rminembecausemofmthemsubjectivitymandmmultitudemofm factorsminvolvedminmdeterminingmprice.m
Reasonablenessmismmostmlikelymtombemanmissuemwhenmampaymentmismmademtomamrelatedmindivid
ualmormthemtaxpayermenjoysmsomempersonalmbenefitmincidentalmtom themexpenditure.
4. [LO m1]mJakemismamprofessionalmdogmtrainermwhompurchasesmand mtrainsmdogsmformusembymlaw
menforcement magencies.mLast myearmJakempurchased m500mbagsmof mdogmfood mfrommamlargempe
t mfood mcompanymat manmaveragemcost mof m$30mpermbag.mThismyear,mhowever,mJakempurchased m
500mbagsmof mdogmfood mfrommamlocalmpet mfoodmcompanymat manmaveragemcost mof m$45mpermbag
.mUndermwhat mcircumstancesmwould mthemIRSmlikelymchallengemthemcost mof mJake’smdogmfoo
d masmunreasonable?
Amcommonmtestmformreasonablenessmismwhethermthemexpendituremismcomparablem tomanmarm'sml
engthmamountm–
mampricemchargedmbymobjectivem(unrelated)mindividualsmwhomdomnotmreceivemanymincidentalmp
ersonalmbenefits.mHence,mthemIRSmismmostmlikelymtomchallengemthemcostmofmthemdogmfoodmifmJak
e’smrelativesmcontrolmormownmthemlocalmpetmfoodmcompanymandmwasmbenefitingmfrom mthemincre
asedmprice.
©mMcGrawmHillmLLC.mAllmrightsmreserved.mNomreproduction mormdistributionmwithoutmthemprior mwrittenmconsentmofmMcGrawmHillmLLC.
1
mynursytest.store
,ACCESS Test Bank for McGraw Hill's Taxation of Business Entities 2023 Editio
m m m m m m m m m m m
n 14th Edition Spilker
m m m
SolutionsmManual—TaxationmofmBusinessmEntities,mbymSpilkerm et mal.
5. [LO m2]mWhat mkindsmof mdeductionsmaremprohibited masmammattermof mpublicmpolicy?mWhymmig
ht mCongressmdeemmit mimportant mtomdisallow mdeductionsmformexpendituresmthat maremagainst mp
ublicmpolicy?
ThemCodemlistsmbribes,mkickbacks,mandm“other”millegalmpaymentsmasmnondeductible.mCongre
ssmdidn’tmwantmthemtaxmbenefitsmassociatedmwithmdeductionsmtombenefitmorm subsidizemwrongdo
ing.mOfmcourse,mthismrationalemdoesn’tmreallymexplainm themprohibitionmagainstmdeductingmpol
iticalmcontributionsmwhichmismprobablymbettermexplainedmbym thempotentialmperceptionmthatmpo
liticalmeffortsmarembeingmsubsidizedmbymtaxpayers.
6. [LO m2]mProvidemanmexamplemof manmexpensemassociated mwithmthemproductionmof mtax-
exempt mincome,mand mexplainmwhat mmight mhappenmif mCongressmrepealed mthemprohibitionm
against mdeductingmexpensesmincurred mtomproducemtax-exempt mincome.
Twomcommonmexamplesmareminterestmexpensemassociatedmwithmdebtmusedmtompurchasemmuni
cipalmbondsmandmlifeminsurancempremiumsmpaidmonmkeymmanminsurance.mIfmthismprohibitionm
weremrepealed,mthenmtaxpayersmwouldmhavemanmincentivemtomborrowmtominvestminmmunicipalm
bondsmormborrowmtominvestminmemployeemlifeminsurance.mThismformermpracticemwouldm leadmto
mhighermdemandmformmunicipalmbondsm(lessmyield)mandmlessmrevenuemformthemgovernment.mTh
emlattermpracticemwouldmleadmtomhighermdemandmforminsurancem(highermpremiums?)mandmles
smrevenuemformthemgovernment.mBothmpracticesmcouldmleadmtomamperceptionmofminequitymbetw
eenmthosemtaxpayersmablemtomutilizemthemtaxmarbitragemtomreducemtaxesmandmthosemwhomcould
mnotmusemthempractice.
7. [LO m2]m{Research}mPeggymismamrodeomclown,mand mthismyearmshemexpended m$1,000monmspec
ialm“funny”mclothesmand moutfits.mPeggymwould mlikemtomdeductmthemcostmof mthesemclothesmasm
work-
mrelated mbecausemshemrefusesmtomwearmthemclothesmunlessmshemismworking.mUndermwhat mcirc
umstancesmcanmPeggymdeduct mthemcost mof mhermclownmclothes?
Taxpayersmmaymdeductmthemcostmofmuniformsmormspecialmclothingmtheymuseminmtheirmbusinessm
whenmthemclothingmismnotmappropriatemtomwearmasmordinarymclothingmoutsidemthemplacemofmbu
siness.mInmPeggy’smcase,mthemclownmclothesmaremanalogousmtomspecialmuniformsmormprotectiv
emgarmentsmandmcouldmbemdeductible.mSeemD.mTechner,mTCmMemom1997-
498.mErhardmSeminarmTraining,mTCmMemom1986-
526mprovidesmanmexamplemofmclothesmthatmweremnotmdeductiblembecausemtheymweremappropri
atemformnormalmwear.mHowever,mthemcostmofmclothingmwouldmnotmlikelymbemdeductiblemifmthemc
lothesmweremunacceptablemsolelymbecausemofmthemtaxpayer’smsensemofmfashion.
8. [LO m2]mJimmymismamsolemproprietormof mamsmallmdry-
cleaningmbusiness.mThismmonthmJimmympaid mformhismgroceriesmbymwritingmchecksmfrommt
hemcheckingmaccount mdedicated mtomthemdry-
mcleaningmbusiness.mWhymdomyoumsupposemJimmym ismusingmhismbusinessmcheckingmaccou
nt mrathermthanmhismpersonalmcheckingmaccount mtompaymformpersonalmexpenditures?
Jimmymmightmbemtryingmtomreducemhismbankmchargesmbymusingmonemaccountmformbothmpersona
lmandmbusinessmexpenditures,mbutmhemcouldmalsombemtryingmtomdisguisempersonalmexpenditures
mas
©mMcGrawmHillmLLC.mAllmrightsmreserved.mNomreproduction mormdistributionmwithoutmthemprior mwrittenmconsentmofmMcGrawmHillmLLC.
2
mynursytest.store
, ACCESS Test Bank for McGraw Hill's Taxation of Business Entities 2023 Editio
m m m m m m m m m m m
n 14th Edition Spilker m m m
SolutionsmManual—TaxationmofmBusinessmEntities,mbymSpilkerm et mal.
businessmexpenses.mBymcomminglingmbusinessmandmpersonalmexpenditures,mJimmymwillmneed
mtomseparatempersonalmandmbusinessmexpendituresmbeforemclaimingmanymbusinessmdeductions
.
9. [LO m2]mTroymoperatesmanmeditorialmservicemthat moftenmentertainsmprospectivemauthorsmtomenc
ouragemthemmtomusemTroy'smservice.mThismyearm Troympaid m$3,000mformthemcost mof mmealsmand
$6,200mformthemcost mof mentertainingmauthors.mDescribemthemconditionsmundermwhichmTroymca
nmdeduct mamportionmof mthemcost mof mthemmealsmasmambusinessmexpense.
Tomdeductm100mpercentmofmthemcostmofmmealsmasmambusinessmexpense,mthemmealsmmustmbemordi
narymandmnecessarymtomTroy’smbusiness,mprovidedmbymamrestaurant,mandmthemamountmmustmbe
mreasonablemundermthemcircumstances.mInmaddition,mTroymormanmemployeemmustmbempresentm
whenmthemmealmismfurnished,mandmthemmealmmustmbemfurnishedmtomanmactualmormpotentialmbusi
nessmassociate.mFinally,mthemcostmofmthemmealsmmustmbemseparatelymstatedm(byminvoice)mfromm
themcostmofmthementertainmentm(themcostmofmthementertainmentmismnotmdeductible).mIfm themmeals
mandmbeveragesmaremnotmprovidedmbymamrestaurant,mthenmonlym50mpercentmismdeductiblem(assu
mingmallmofmthemothermrequirementsmaremmet).
10. [LO m2]mSusmitampurchased mamcarmthismyearmand musesmit mformbothmbusinessmand mpersonalm
purposes.mSusmitamdrovemthemcarm11,000mmilesmonmbusinessmtripsmand m9,000mmilesmformp
ersonalmtransportation.mDescribemhow mSusmitamwillmdeterminemthemamount mof mdeductibl
emexpensesmassociated mwithmthemauto.
Becausemonlymthemexpensemrelatingmtombusinessmusemismdeductible,mthemtaxpayermmustmallocat
emthemexpensesmbetweenmthembusinessmandmpersonalmusemportions.mAmcommonmmethodmofmall
ocationmismrelativemuse.mInmthisminstance,mSusmitamwouldmcalculatemthembusinessmportionmbas
edmuponmthemratiomofmbusinessmmilesmtomtotalmmilesm(11/20morm55mpercent).mShemwouldmthenmd
eductmthemcostsmofmoperatingmthemvehiclemformbusinessmpurposesmplusmdepreciationmonmthembu
sinessmportionm(55mpercent)mofmthemvehicle’smtaxmbasis.mAlternatively,m inmlieumofmdeductingmth
esemcosts,mSusmitammaymelectmtomdeductmamstandardmamountmformeachmbusinessmmilemshemdriv
es.mThemstandardmmileagemratem(58.5mcentsmpermmilemformthemfirstmsixmmonthsmofm2022mandm6
2.6mcentsmformthemfinalmsixmmonths)mrepresentsmthemper-
milemcostmofmoperatingmanmautomobilem(includingmdepreciationmormleasempayments).mOncemS
usmitamhasmmademthismelection,mshemmustmcontinuemtomusemitmthroughoutmthemlifemofm themauto.
11. [LO m1,mLOm2]mWhat mexpensesmare mdeductiblemwhenmamtaxpayermcombinesmbothmbusiness ma
nd mpersonalmactivitiesmonmamtrip?mHow mdomthemrulesmforminternationalmtravelmdiffermfrommthe
mrulesmformdomesticmtravel?
Ifmthemtaxpayermhasmbothmbusinessmandmpersonalmmotivesmformamtrip,mbutm themprimarymormdo
minantmmotivemismbusiness,mthemtaxpayermmaymdeductmthemtransportationmcostsmtomgetmtomthem
placemofmbusiness,mbutmshemmaymdeductmonlymmealsm(50%morm100%mifmprovidedmbymamrestaur
ant),mlodging,mtransportationmonmsite,mandmincidentalmexpendituresmform thembusinessmportion
mofmthemtravel.mIfmthemtaxpayer’smprimarympurposemform themtripmismpersonal,mthem taxpayermma
ymnotmdeductmtransportationmcostsmtomtravelm tomandmfrom mthemlocation,mbutmthemtaxpayermma
ymdeductmmealsm(50%morm100%mifmprovidedmbymamrestaurant),mlodging,mtransportation,mandm
incidentalmexpendituresmformthembusinessmportionmofmthemtrip.mFor
©mMcGrawmHillmLLC.mAllmrightsmreserved.mNomreproduction mormdistributionmwithoutmthemprior mwrittenmconsentmofmMcGrawmHillmLLC.
3
mynursytest.store
