Diane is a self-employed graphic designer with a qualified in-home office. Which of the following is not a business expense for Diane? A. 80% of expenses attributable to business lunches.
B. Tax preparation fees relating to the consulting business.
C. Direct and indirect expenses of using the home for business purposes.
D. Legal expenses attributable to her business.

A. 80% of expenses attributable to business lunches.

Explanation:

Based on the options given, the business expense for Diane would be tax preparation fees relating to the consulting business, the direct and indirect expenses of using the home for business purposes and the legal expenses attributable to her business.

It should be noted that 80% of expenses attributable to business lunches is the correct option. This is a sort of trick question. Why should only 80% of the lunch expense be attributable and not the whole 100%.

The correct option is A.