Eljay, LLP owns several apartment complexes and office buildings. The leasing and management of these buildings constitutes Eljay’s only business activity. During the current year Eljay incurred the following:
• $900 in airfare and lodging for a trip to Washington, D.C. The purpose of the trip was to protest proposed tax rate increases for individuals and corporations.
• $700 for renting space on billboards along the highway. The billboards express its concern regarding pending legislation that would significantly increase property taxes.
• $500 in airfare and hotel bills incurred on a trip to the state capital. The purpose of the trip was to meet with the legislative subcommittee on property taxation.
• $50 for a subscription to a political newsletter published by a national political party.
• $150 in making a presentation to the county council protesting a proposed increase in the property tax levy.
a. What is the total amount Eljay may deduct because of these expenditures?
b. Assume all the same facts as in Part a except that the expenses for the trip to the state capital are only $300 instead of $500. What amount may Eljay deduct because of these expenditures?