During the year, Walt travels from Seattle to Tokyo (Japan) on business. His time was spent as follows: 2 days travel (one day each way), 2 days business, and 2 days personal. His expenses for the trip were as follows (meals and lodging reflect only the business portion):
Air fare $3,000
Lodging 2,000
Meals and entertainment 1,000
Presuming no reimbursement, Walt's deductible expenses are:
a. $3,500.
b. $4,500.
c. $5,500.
d. $6,000.
e. None of these.
c
RATIONALE: $3,000 + $2,000 + (50% × $1,000) = $5,500 . Since the 7-days-or-less exception applies, the full airfare ($3,000) is allowed.
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