Final answer:
Ed can deduct $250 for AGI, which is 50% of his meals during the medical convention, and $1,300 from AGI for his airfare to rental property and seminar fees. Entertainment costs like football game tickets are typically not deductible.
Step-by-step explanation:
To determine the deductible expenses for Ed, a self-employed heart surgeon, we must consider the Internal Revenue Service (IRS) rules on what is deductible for both business and investment purposes. Here is the breakdown:
- $1,000 in air fare to repair investment rental property in Colorado: This is deductible as it's tied directly to maintaining or improving investment property, which is a deductible expense. However, this would typically be deducted from AGI as it's an investment expense, not a business one.
- $500 in meals while attending a medical convention in New York: This expense, because it is directly related to Ed's profession, is generally 50% deductible for AGI, which amounts to $250.
- $300 for tuition for an investment seminar "How to pick stocks": This is also an investment expense similar to the airfare for the rental property and would be deducted from AGI.
- $100 for tickets to a football game with hospital administrators: Such entertainment costs are generally not deductible under current tax law, especially after the Tax Cuts and Jobs Act (TCJA) eliminated the entertainment expense deduction, unless they are directly related to the active conduct of a trade or business and meet specific requirements, which seems unlikely in the given scenario.
Thus, we can deduce that Ed can deduct $250 for AGI (50% of the meals at the medical convention) and an additional $1,300 from AGI (airfare and seminar fees).
The correct answer to this question, therefore, is D. $80 "for AGI" and $1,300 "from AGI."