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.

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Definitions:

Species

A category of living organisms consisting of similar individuals capable of exchanging genes or interbreeding.

A-B-O Blood System

A classification system for human blood based on the presence or absence of antigens in red blood cells, instrumental in blood transfusion and organ transplantation practices.

Type O

A blood type in the ABO blood group system that is characterized by the absence of A and B antigens on red cells.

Analogous Structures

Physical structures in different species that perform similar functions but have evolved independently, hence do not share a common ancestor.