87. Eloise is a sales representative for a video production company. While at an exposition, she incurs $2,000 in entertainment expenses and $1,200 for meals. The expenses occur while she is discussing business and Eloise makes an adequate accounting to her employer and is reimbursed $1,200. How much may Eloise deduct if her AGI is $40,000?

	a.	$- 0 -
	b.	$1,200 for AGI and $200 from AGI.
	c.	$1,200 for AGI and $2,000 from AGI.
	d.	$- 0 - for AGI and $200 from AGI.
	e.	$- 0 - for AGI and $1,000 from AGI.

ANSWER:

b

88. Brees Co. requires its employees to adequately account for all reimbursed business expenses. Tracy, an employee of Brees Co. has AGI of $50,000 and submitted for reimbursement the following valid business expenses:

Transportation costs	$1,000
Meals	700
Entertainment costs	500
Hotel costs	800

What are the tax consequences if Brees reimburses Tracy $2,400?

I.	Tracy must report $2,400 of income.
II.	Tracy can deduct $2,400 of the expenses for AGI and $-0- as miscellaneous itemized deductions, after limitations.

	a.	Only statement I is correct.
	b.	Only statement II is correct.
	c.	Both statements are correct.
	d.	Neither statement is correct.

ANSWER:

c

The questions are from test bank 2016. With the current tax law, are these answers still correct?? I want to know the updated answers, thanks!