Erica Garcia and Lance Trout Are Regularly Employed by a Company

question 120

Essay

Erica Garcia and Lance Trout are regularly employed by a company in Phoenix. During the current year, both accepted work for the company in another city located 250 miles from Phoenix. Erica realistically expected her work to last about 18 months. However, the work was completed in 10 months and she returned to Phoenix. Lance, on the other hand, realistically expected his work in the other city to be completed in nine months when he took the job. However, after eight months, he was asked to remain for seven more months. His total work assignment lasted 15 months.
(a.) Are Erica's travel expenses deductible? Explain. (b.) Are Lance's travel expenses deductible? Explain.

---

Definitions:

Priority of Creditors

The legal principle determining the order in which creditors are paid in the event of a debtor's bankruptcy or liquidation of assets.

Secured Transactions

Financial agreements or deals where the borrower provides a creditor a security interest in an asset as collateral for a loan.

Bailment for Value

A legal relationship in which physical possession, but not ownership, of personal property is transferred from one person to another for a specific purpose, with an expectation of compensation.

Gratuitous Bailment

A bailment where the bailor transfers possession of property to the bailee without expecting any payment or benefit in return.