Q 88

Brees Co.requires its employees to adequately account for all reimbursed business expenses.Tracy,an employee of Brees Co.has AGI of $50,000 and submitted for reimbursement the following valid business expenses: ​ img What are the tax consequences if Brees reimburses Tracy $2,400? I)Tracy must report $2,400 of income. II)Tracy can deduct $2,400 of the expenses for AGI and $-0- as miscellaneous itemized deductions,after limitations. ​ A)Only statement I is correct. B)Only statement II is correct. C)Both statements are correct. D)Neither statement is correct.

Multiple Choice