Question

f. g. Major overhaul Personal property taxes on car h. Tolls Transportation Expenses. Indicate the amount, if any, deductible by the taxpaver each of the following cases. (Ignore the rules on miscellaneous itemized deductions a. R owns and operates his own advertising agency as an independent contractor. He 8-28 .) works in downtown Denver, but chooses to live in the mountains 90 miles During the year, he spent $2,700 for transportation expenses to and from away work. b. Q, a high school basketball coach, liked to scout his opposition. On one Friday afternoon, he left school and drove 40 miles to attend the game of the team he played next. On the way, he stopped for a meal ($5). He watched the game returned home. and , a carpenter, is an independent contractor. He commutes to work in a tru He drives the truck in order to carry the tools o total transportation costs were $5,000. R estimates that his costs of transportation without the tools would have been $4,000, since he otherwise would have taken public transportation G, a self-employed attorney, works downtown. She is on retainer, however, with a client who has offices two miles from her home. G often stops at the client's office before going to work. The distance between these locations is as follows: home to office, 20 miles; home to client, 2 miles; and client to office, 22 miles. During the year, G drove directly to work 180 days and via the client's offce 50 days. ck. f his trade. During the year, R's d.

Answer 1

Transport expenses must be business related or oriented i.e, Travelling must be primarily business-related in order to be deductible. Pleasure trips are never deductible. You can deduct travel expenses only if you are traveling away from home in connection with the pursuit of an existing business.

You must be "away from home" to deduct travel expenses. It sounds obvious, but you must be traveling in order to deduct traveling expenses. That is you must be "away from home."

For travelling away from home two conditions are:

• The travel is away from the general area or vicinity of your tax home.
• Your trip is long enough or far away enough that you can't reasonably be expected to complete the round trip .
• Generally, your tax home is the entire general area or vicinity (e.g., a city and surrounding suburbs) of your principal place of business, regardless of the location of your personal or family's home.

(A) R 's business is located in downtown & his home home 90 miles away from it. Eventhough R is travelling daily from home to business. It is not a business travel . Hence not deductible

(B) Meals Eaten Alone While Traveling Are Deductible. The cost of dining alone is a deductible expense only if your business trip is overnight or long enough to require that you stop for sleep or rest.

Eventhough it is not a long trip , meals of $5 regards to game he attended .Hence deductible

(C) R can deduct travel expenses amounting to $5000. As he need to carry tools for trade.

(D) G can claim eduction for 50 days as she visiting client for business purpose. Rest of 180 daysshe cannot claim as it is regards to her normal travel to office.