Question

Dave is the regional manager for a national chain of auto-parts stores and is based in Salt Lake City. When the company opens new stores in Boise, Dave is given the task of supervising their initial operation. For three months, he works weekdays in Boise and returns home on weekends. He spends $350 returning to Salt Lake City but would have spent $410 had he stayed in Boise for the weekend. As to the weekend trips, how much, if any, qualifies as a deduction?

a. $0, since the trips are personal and not work related.
b. $0, since Dave's tax home has changed from Salt Lake City to Boise.
c. $60
d. $350
e. $410

Answer 1

Dave can potentially deduct the $350 he spends on travel for returning home on weekends since these expenses are considered work-related (d). The additional $60 saved by not staying in Boise is not deductible.

Step-by-step explanation:

The question is about tax deductions for travel expenses incurred by Dave, a regional manager who travels for work but returns home on weekends. If Dave's tax home is still considered Salt Lake City, the actual cost of the trips to go home can be considered deductible.

Dave spends $350 to return home but would have spent $410 if he had stayed in Boise for the weekend. Therefore, the difference of $60 (the amount he saves by not staying in Boise) does not qualify as a deduction. However, the $350 he does spend on returning home could be viewed as work-related, allowing for that amount to be deducted. Thus, the answer to the question would be $350 qualifies as a deduction.