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12 July, 21:52

Holly took a prospective client to dinner, and after agreeing to a business deal, they went to the theater. Holly paid $350 for the meal and separately paid $226 for the theater tickets, amounts that were reasonable under the circumstances. What amount of these expenditures can Holly deduct as a business expense?

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  1. 12 July, 22:11
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    Answer: $175

    Explanation:

    Here we can see that the business discussion happened only at dinner.

    After Dinner they went for entertainment at the Cinema so that amount is not deductible as a business Expense.

    The only amount deductible is the $350 for the meal.

    Meals with clients are considered to be 50% deductible so solving for that we have,

    = 350 * 0.5

    = $175

    $175 is amount of the expenditures that Holly can deduct as a business expense.
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