Matt Is a Sales Representative for a Local Company

question 97

Multiple Choice

Matt is a sales representative for a local company.He entertains customers as part of his job.During the current year he spends $3,000 on business entertainment.The company provides him an expense allowance of $2,000 under a nonaccountable plan.How will Matt treat the $2,000 partial reimbursement and the $3,000 entertainment expense?

• A)He will deduct the $1,000 net expense as a miscellaneous itemized deduction,subject to the 2% of AGI floor.
• B)He will deduct $500 of the net expense as a miscellaneous itemized deduction,subject to the 2% of AGI floor.
• C)He will recognize $2,000 of income and deduct $3,000 as a miscellaneous itemized deduction,subject to the 2% of AGI floor.
• D)He will recognize $2,000 of income and deduct $1,500 as a miscellaneous itemized deduction,subject to the 2% of AGI floor.

---

Definitions:

Decodes

The act of interpreting or making sense of a message, symbol, or piece of information, translating it into a comprehensible format.

Psychological Barrier

An emotional or mental obstacle that impedes a person's ability to communicate, perform, or achieve goals.

Effective Listening

This refers to the process of actively paying attention, understanding, remembering, evaluating, and responding to what is being said.

Fused Sentence

A grammatical error that occurs when two independent clauses are improperly joined without the use of punctuation or a coordinating conjunction.