← Complete study path
P2-U04 · PART 2 · SOURCE CYCLE 2026-2027
Business Expenses
Only cards whose complete question and answer were checked against exact primary-authority evidence appear here.
Q1.Alder is evaluating a trade-or-business cost. What threshold must it meet to be deductible?
It must be ordinary and necessary
Q2.Alder is present at an ordinary business meal that is not lavish or extravagant. What percentage is generally deductible?
50%
Q3.Which travel costs fall within the federal tax definition of business travel expenses?
Ordinary and necessary costs of traveling away from home for a business, profession, or job
Q4.What standard mileage rate applies to business use of a car for 2025?
70 cents per mile
Q5.What is the general deduction rule for premiums on qualifying insurance related to a business?
The premiums are generally deductible
Q6.What happens to the home-office exclusive-use test when the same area is used for both business and personal purposes?
The area generally fails the exclusive-use test
Q7.What records must a business traveler retain for away-from-home travel?
Records of all travel expenses and employer advances received
Q8.For a business expense to be deductible, it must be both: A. “Ordinary” and “necessary.” B. “Beneficial” and “customary.” C. “Substantiated” and “necessary.” D. “Usual” and “customary.”
“Ordinary” and “necessary.”
Q9.In order for a business to deduct meal expenses, which of the following is correct? A. The meal resulted in new or expanded business. B. The meal was paid in cash. C. The meal is an ordinary and necessary business expense. D. The meal was provided for the benefit of employees.
The meal is an ordinary and necessary business expense.