Marilyn, an independent contractor who lives and works in Cleveland, obtains a large contract that will require

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Marilyn, an independent contractor who lives and works in Cleveland, obtains a large contract that will require her to live and work in Atlanta for a period of ten months. Marilyn leaves her husband and children in Cleveland and rents an apartment in Atlanta during the ten-month period. Marilyn incurs the following expenses

Airfare to and from Atlanta

$ 800

Airfare for weekend trips to visit her family

8,000

Aparcment rent

10,000

Meals in Atlanta

8,500

Entertainment of customers

2,000

Total

$29,300


a. What are Marilyn's total deductions for 2019?

b. Are the expenditures classified as for AGI or from ACI deductions?

c. Do the tax consequences change if Marilyn's assignment is for a period of more than one year?

d. Do the tax consequences in Parts a through c change if it was realistically expected that the work would be completed in ten months but after the ten-month period Marilyn is asked to continue for seven more months and if an additional $10,000 of travel expenses are incurred during the extended period?

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Federal Taxation 2020 Comprehensive

ISBN: 9780135196274

33rd Edition

Authors: Timothy J. Rupert, Kenneth E. Anderson, David S. Hulse

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