Victor Is a Sales Representative for Valley Winery

Victor is a sales representative for Valley Winery. Victor receives a monthly travel allowance from Valley to cover his travel costs (transportation, food, lodging, etc.) . If Victor is required to account to Valley for the use of the travel advance and to return any excess travel advance
i.To the extent Victor is reimbursed for less than his costs, part of his expenses are deducted for AGI and part are deducted from AGI.II.Victor must include the travel allowance in his gross income. His actual costs are deductible from AGI, subject to all applicable limits on such deductions.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.

Correct Answer:

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