Marilyn, an independent contractor who lives and works in Cleveland, obtains a large contract that will require
Question:
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?
Step by Step Answer:
Federal Taxation 2020 Comprehensive
ISBN: 9780135196274
33rd Edition
Authors: Timothy J. Rupert, Kenneth E. Anderson, David S. Hulse