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Accounting

Problem:

Maxine incurs the following employment-related business expenses in the current year:

Professional dues and subscriptions $1,000

Airfare and lodging 2,000

Local transportation for employment-related business activities 1,000

Customer entertainment (business lunches where business is discussed) 1,000

Total = $5,000

After making an adequate accounting of the expenses, Maxine receives a reimbursement of $3,000 from her employer. Assume that Maxine's AGI is $60,000, she has other miscellaneous itemized deductions of $1,000 and she does not use the standard deduction.

Required:

Question 1: What amount of expenses is deductible by Maxine?

Question 2: Are each of these expenditures classified as for AGI or from AGI deductions?

Question 3: How would your answers to part a and b change if Maxine instead received a $6,000 reimbursement?

Note: Explain all steps comprehensively.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165076

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