Tom operates an illegal drug-running operation and incurred the following expenses: Which of the above amounts reduces his taxable income?

Question

Tom operates an illegal drug-running operation and incurred the following expenses:  Which of the above amounts reduces his taxable income?

Quizplus · Accepted Answer

Although the expenses incurred are related to an illegal activity, they can still be deducted from Tom's income as business expenses. Therefore, the answer is $160,000 (the total expenses incurred). However, it is important to note that this deduction is only applicable in this scenario and illegal activities should not be pursued as a means of business or income.

Tom Operates an Illegal Drug-Running Operation and Incurred the Following