When a self-employed individual travels for business but mixes in some pleasure days, such as sightseeing, how does the taxpayer deduct expenses connected with the travel expenses to and from the destination as well as expenses while at the destination (such as hotel, meals, etc.)?

A.

When a taxpayer mixes business and pleasure on a trip, the tax law requires that the trip be deemed as either primarily business or primarily personal. If the trip is primarily business (more days spent on business than pleasure), the entire cost of the transportation to and from the destination is deductible. Other expenses, such as hotel and meals, are deductible only on the business days. If the trip is primarily personal, no expenses incurred in travelling to and from the destination are deductible. The other costs (hotel, meals, etc.) are deductible only for the business days.

B.

When a taxpayer mixes business and pleasure on a trip, the entire cost of the trip is deductible as long as the number of pleasure days is less than 20% of the total days of the trip.

C.

When a taxpayer mixes business and pleasure on a trip, the amount deductible is the entire cost of the transportation and hotel expenses. Meal costs are only deductible on the business days.

D.

When a taxpayer mixes business and pleasure on a trip, the amount deductible is the total cost of the trip pro-rated based on the business days over the total days.