a. 274(c) restricts 162(a)(2) when mixed business and pleasure trips take place outside the US; however, foreign travel must still meet 162 primary purpose test, otherwise, none of the travel cost are deductible
b. Exceptions to 274(c) application to foreign travel:
i. 274(c) applies only if:
1. the trip outside the US exceeds one week (the first day of travel will not be counted, but the day on which the travel ends will be considered) 1.274-4(c) or
2. 25% or more of the time outside the US is devoted to non-business activity.
c. 274(c) states:
i. transportation cost incurred for foreign business travel are to be allocated by reference to the number of days devoted to business and personal activities (on a pro rata basis)
1. for the purposes of 274, a day is devoted to business if the taxpayer’s principle activity during the hours normally appropriate for business is related to the taxpayer’s trade or business.
d. 1.274-4(d)(2)(i) states: travel days are considered to be business days if the taxpayer can establish that they were traveling in pursuit of trade or business.
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