I have a client who does entertaining on a Cruise Liner, he is away from home 122 days a year, they pay his air fare, accomadations, is he allowed to take a per diem for meals for the days he's gone? If so how much? He goes on the Carnival Cruise Lines out of FL. Thank you for your help.
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Are meals provided also? If so I would say nyet to meal deduction but maybe on incidentals. -
Everyone on Cruise Ships get free meals in at least one of the buffet restaurants on board, including the crew. They also get free rooms. Those free meals and free rooms are treated as employer provided meals and lodging under Section 119...not taxable to the recipient. You can't take per diem for employer provided tax free fringe benefits.Comment
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I agree you cannot take the FULL per diem if meals are provided but Absolut may want to take a look at a regular Tax Court decision Johnson 115 TC No. 16. It seems a limited deduction may be available.
In that case, a seaman who was provided his meals while on the ship wanted to take the full M&IE allowance for the time he was at sea. The Court ruled against him but did allow the IE portion (the portion attributable to incidental expenses). For CONUS locations, it was $2 per day. For other locations, it varied.
New York Enrolled AgentComment
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