Travel, Entertainment & Auto Rules
Field of Study:
Updating practitioners on current developments, this core program examines and explains the practical aspects of travel
and entertainment deductions. Fundamentals are reviewed and planning opportunities identified. Creative strategies
are discussed and evaluated along with traditional approaches. Taxpayers are once again looking to their tax professional
for guidance and planning related to travel and entertainment expenses. The goal of this course is to understand and
solve problems. Participants will learn to master the proper administration of these complex and often cumbersome
provisions in a humorous and entertaining format.
After completing this course you will be able to:
- Determine the difference between transportation and business travel under §162 by identifying types of business travel expenses and the deduction & amortization requirements of §165 and §195.
- Specify deductible travel costs to find a new job, identify investor travel expenses, and determine deductible transportation.
- Identify the business purpose requirement noting the complications of mixed business and personal travel noting the costs at a destination.
- Recognize the IRS’s and Circuit Courts’ definition of “tax home”, identify when a taxpayer lacks a tax home, and specify the “away from home” requirement including the sleep and rest rule.
- Identify temporary and indefinite job assignments recognizing the critical factor in distinguishing the two job assignments.
- Identify the elements of domestic business travel noting what costs are deductible.
- Specify the “point-to-point” rule for different modes of transportation and which expenses incurred on a business trip with an extended stay or side trip are deductible.
- Identify the rules for foreign business travel.
- Recognize the deduction of convention and meeting expenses based on Reg. §1.162.
- Determine the rules and limitations on cruise ship conventions noting the luxury water travel exception, recognize the companion travel expense limitations, and identify whether expenses for aides to handi-capped taxpayers accompanying the taxpayers on business trips are de-ductible travel expenses.
- Determine what constitutes transportation, local transportation, and commuting, recognize when parking fees are deductible, and specify the effect of the Washburn case on commuting deductions.
- Identify the regular/irregular rule, determine a temporary work site under R.R. 90-23, recognize the impact of R.R. 94-47 and R.R. 99-7 on transportation between a taxpayer’s residence and workplace, specify the §280A home office requirements noting its impact on business transportation, and identify the hauling tool rule.
- Recognize the apportionment of business and personal use of an au-tomobile.
- Determine actual cost method expenses, auto depreciation and §179 expensing.
- Recognize the §179 expensing deduction’s relationship to depreciation noting when to use it.
- Specify the impact of the §280F predominate business use rule, as established by the Tax Reform Act of 1984, on depreciation, excess deductions, and the former investment tax credit.
- Determine automobile leasing elements noting vehicle purchase dif-ferences, specify various leasing terminology including closed-end and open-end, identify monthly lease payments and income inclusion amounts, and cite the leasing deduction restrictions.
- Identify the mechanics of the standard mileage method including the ability to switch methods, deduct charitable and medical transporta-tion, and MACRS depreciation limitations.
- Recognize the differences between trading and selling a vehicle noting employer-provided vehicles as §132 fringe benefits.
- Determine entertainment using Reg. §1.274 and other related de-ductible business expenses.
- Identify the deductible entertainment tests of §274.
- Identify deductible home entertainment expenses, determine the limits of ticket purchases, and cite provisions under which goodwill enter-tainment may be deductible.
- Recognize the 50% reduction for meals and entertainment and related expenses noting exceptions.
- Determine what constitutes an entertainment facility specifying ex-cluded facilities types and costs and recognize the effect of OBRA ’93 on club dues.
- Identify the tax benefits and substantiation requirements for business gifts, employee achievement awards, and sales incentive awards.
- Identify expense categories subject to the detailed substantiation re-quirements of §274(d) and the exceptions to these requirements, and specify elements to be proven noting which elements must be proven for the expense type.
- Cite ways to substantiate travel and entertainment expenses noting required records.
- Recognize the sufficiently corroborated statements method of sub-stantiation including when this method can be used, and determine methods that can be used to substantiate the requisite elements of listed property expenditures noting how long records should be re-tained.
- Identify whether an employee must file Form 2106, determine the substantiation requirements of TRA ‘86 and Family Support Act 1988, and specify the requirements for an accountable plan noting “reasona-ble period of time” safe harbors.
- Determine how to adequately account for travel and other employee business expenses.
- Determine how to report income and expenses with or without ade-quate accounting, specify the differences between entertainment and non-entertainment expenses incurred by an independent contractor, identify whether an employer can take deductions for reimbursed trav-el, entertainment, meals, and/or business gifts, and determine how to make appropriate disclosures on tax returns of required information.
General understanding of federal income taxation.
Type of Delivery Method:
Recommended CPE Credits:
Final examination expiration date:
The program participant will have one year from the date of purchase to complete the course and final examination.
Web CPE is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org