Question

Jack is a lawyer who is a member at Ocean Spray Country Club where he spends $7,200 in dues, $4,000 in business meals, and $2,000 in green fees to entertain clients. He has separate invoices for the meals. He is also a member of the local Rotary club where he meets potential clients. The dues for the Rotary club are $1,200 a year. How much of the above expenses can Jack deduct as business expenses? a. $14,400 b. $4,200 c. $7,200 d. None of these e. $3,200

Answer 1

Answer:

E) $3,200

Explanation:

Jack can deduct up to 50% of the business meals = $4,000 x 50% = $2,000

entertainment expenses are no longer deductible

since the Rotary Club is considered to pursuit a humanitarian nature, jack can deduct the yearly dues = $1,200

total deductions in 2019 = $2,000 + $1,200 = $3,200