Question

During the year, John (a self-employed management consultant) went from Milwaukee to Hawaii on business. Preceding a five-day business meeting, he spent four days vacationing at the beach. Excluding the vacation costs, his expenses for the trip are: Airfare $3,200 Lodging 900 Meals 800 Entertainment 600 Presuming no reimbursement, deductible expenses are:

Answer 1

The deductible business expenses for John's trip to Hawaii would include airfare, lodging for the business days, meals, and business-related entertainment, excluding any costs associated with personal vacation days.

Step-by-step explanation:

The student's question pertains to determining the amount of deductible expenses for a self-employed individual's business trip to Hawaii, excluding personal vacation costs. In this scenario, John, a self-employed management consultant, has incurred various expenses during his business trip. However, only the costs directly related to the business activities are typically considered tax-deductible. Given the information, the deductible business expenses would include the airfare, lodging for the business days, meals, and entertainment related to the business. Though without specific tax law context, we can assume that personal vacation expenses are not deductible. It is important to note that in practice, the deduction for meals and entertainment may be limited, and the way lodging is calculated may vary based on the number of business days versus personal days.

Answer 2

Answer and Explanation:

Business deduction according to IRS rules:

Particular Amount

Expenses on travelling (100%) $3,200

Meal (50% deductible) $800 × 50% $400

Entertainment (No deduction) $0

Loading charges (100%) $900

Total deductible expenses $4,500