Question

Holly took a prospective client to dinner, and after agreeing to a business deal, they went to the theater. Holly paid $450 for the meal and separately paid $186 for the theater tickets, amounts that were reasonable under the circumstances. What amount of these expenditures can Holly deduct as a business expense?

A. $636
B. $225
C. $318
D. $93
E. None - the meals and entertainment are not deductible except during travel.

Answer 1

Option B is correct one.

$225

Step-by-step explanation:

The cost of entertainment is not deductible . So the amount Holly can deduct as a business expense

= $450 × 50% = $225.