Federal Tax Research 10th Edition by Roby Sawyers,William Raabe,Gerald Whittenburg,Steven Gill

Exercise 25

Newark Marine Food Service (NMFS) sells hot lunches and snacks to the crews of ships that dock at the Port of Newark. According to custom, the officers of the visiting ships receive a five percent "commission" from all sales, so that NMFS can retain its "exclusive rights" to the seamen's business. Are the commissions deductible by NMFS