In Order to Deduct a Portion of the Cost of a Business

question 40

Multiple Choice

In order to deduct a portion of the cost of a business meal which of the following conditions must be met?

• A) A client (not a supplier or vendor) must be present at the meal.
• B) The meal must occur on the taxpayer's business premises.
• C) The taxpayer or an employee must be present at the meal.
• D) All of the choices are conditions for a deduction.
• E) None of the choices is a condition for the deduction.

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Definitions:

Independent Contractor

An individual who provides services to another entity under terms specified in a contract or within a freelance agreement, not considered an employee.

Employee

A person who is hired by another person or business for a salary or wages to perform specific duties.

Confidential Information

Any data or information that is proprietary to a company and not to be shared with competitors or the general public.

Agency Relationship

A legal relationship in which one party, the agent, acts on behalf of another party, the principal, in transactions with third parties.