8. Meals and Entertainment. (Obj. 2) Courtney is employed as a sales person. Dur
ID: 2509077 • Letter: 8
Question
8. Meals and Entertainment. (Obj. 2) Courtney is employed as a sales person. During the year, Courtney pays $250 for tickets to a concert that she gives to a client. Courtney does not attend the concert with the client. Also during the year, she picks up the $210 tab for a dinner for one of her customers. She was in the restaurant at the time the customer was dining, but did not dine with the customer. Courtney was not reimbursed for either of these amounts. Compute Courtney's meals and entertainment deduction and discuss where she reports this amount on her tax return. Education Expenses. (Obj. 2) For each situation described in Parts a. through d., determine whether the taxpayer meets the criteria for the education expense deduction. 9. a. An accountant pays $525 for accounting courses to meet the state's continuing professional education (CPE) requirement. The accountant is employed as a CPA. A CPA pays $3,500 for tuition and books for courses he is enrolled in at law school. The courses count in meeting the states CPE requirements b. A high school teacher pays tuition of $2,700. The teacher is enrolled in graduate school and is taking classes in order to meet the state law requirements that will allow her to renew her teaching certificate. c. d. A company executive pays $8,000 for tuition, books, and transportation to attend an executive MBA program to improve his business management and employee relations skills.Explanation / Answer
Answer 08
a) Generally the entertainment expenses which are necessary in carrying out the business could be claimed.
Under Courtney case she has spent $ 250 for ticket for concert which is for the client. This clearly states this expense is not for her personal matters. Therefore this can be considered as business expenses and can be claimed by Courtney
b) The pickup of tab for $210 is also not the personal expense for Courtney and directly related to business. Therefore this expense can be considered as claimable
09
a) The payment made by accountant for course fee amounting to $ 525 of professional education can be deducted as tax deductible expense as per qualified education expenses
b) The course fees of $ 3,500 paid by CPA can be considered as scholarship which is tax-free expense, therefore this is not a qualified expense
c) The payment of $ 2,700 made by the teacher could be deducted as tax deductible expense as per qualified education expenses
d) The payment made by executive for the amount of $ 8,000 includes tuition, books and transportation. The expense for transportation is not considered as qualified education expense, whereas the payment for tuition and books are qualified education expenses
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