quetions

Suppose that Melissa made the trip to San Francisco primarily to visit the national parks and only attended the business conference as an incidental benefit of being present on the coast at that time. What amount of the airfare can Melissa deduct as a business expense?

If the purpose of the trip is primarily personal, then none of the air fare is deductible and only those direct costs associated with the conference ($1,400) can be deducted (the registration, lodging, 50 percent of the meals, and cab fare).

Suppose that Melissa's permanent residence and business was located in San Francisco. She attended the conference in San Francisco and paid $250 for the registration fee. She drove 100 miles over the course of three days and paid $90 for parking at the conference hotel. In addition, she spent $150 for breakfast and dinner over the three days of the conference. She bought breakfast on the way to the conference hotel and she bought dinner on her way home each night from the conference. What amount of these costs can Melissa deduct as business expenses?

Melissa would be allowed to deduct the registration fee for the conference of $250 and she could deduct $53.5 for the 100 miles she drove to and from the conference (53.5cents per mile x 100 miles) and the parking fee of $90. However, because her travel did not require her to be away from home overnight, she is not allowed to deduct the cost of her meals going to and coming from the conference each day.

$0. Capital expenditures are not deductible. chapter 9`

yuppp

$0. The amount paid to install a machine is capitalized because the cost benefits the useful life of the machine.

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.If the transaction qualified as a nontaxable exchange, the business would take the same adjusted basis in the assets that Dennis had. That is, the business will receive an exchanged basis of $65,000 ($143,000 original basis minus accumulated depreciation of $78,000) in the assets

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a. Because this exchange is a fully taxable transaction, the business's basis in Dennis's assets is the $287,000 fair market value of the assets..

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registration fee, washing and detailing, and engine tune-up are costs for repairs and maintenance that are not required to be capitalized

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the $2,000 repair for the roof was not capitalized. The repair is likely a routine maintenance expenditure rather than a capitalized cost under Reg. 1.263(a)-3. The roof repair is reasonably expected to occur more than once in a 10-year period. However, if the expense resulted in a betterment, restoration or adaptation to new or different use, it would be capitalized. The improvements and legal fees would be capitalized as expenses to purchase the building, to prepare the building for use and begin using the building.

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What amount can Ralph deduct if he and the potential client tried to discuss business during the course of the theatre performance but did not discuss business at any other time?

$0 is deductible. The cost of entertainment that occurs in a setting with little possibility of conducting a business discussion, such as a theater or sports venue, will only be deductible if the entertainment directly precedes or follows a substantive business discussion. In this situation, they did not have any business discussions so Ralph is not allowed to deduct any of the costs.

What amount can Ralph deduct if, prior to the dinner, he met with the potential client to discuss future business prospects?

$235 (50% of the cost of the dinner and theatre) is deductible.

What amount can Ralph deduct if he and the client only discussed business during the course of the dinner?

$235 is deductible. Entertainment is directly related to business if there is an active discussion aimed at generating revenue or fees or the discussion occurs in a clear business setting (in this case, this took place at the dinner table).

Suppose that while Melissa was on the coast, she also spent two days sightseeing the national parks in the area. To do the sightseeing, she paid $1,000 for transportation, $800 for lodging, and $450 for meals during this part of her trip, which she considers personal in nature. What amount of the travel costs can Melissa deduct as business expenses?

None of the costs of sightseeingis deductible. However, because her primary purpose for the trip appears to be business (3 days business vs. 2 days personal) she is allowed to deduct her airfare to San Francisco and her other expenses in part a. relating to the business portion of the trip.