Which of the following expenditures is most likely to be deductible for a construction business?
A)A fine for a zoning violation.
B)A tax underpayment penalty.
C)An "under the table" payment to a government representative to obtain a better price for raw materials.
D)A contribution to the mayor's political campaign fund.
E)An arm's length payment to a related party for emergency repairs of a sewage line.

Question

Quizplus · Accepted Answer

An arm's length payment to a related party for emergency repairs of a sewage line is a legitimate business expense and can be deducted on the company's tax return. The other options involve illegal or unethical activities and are not deductible.

Which of the Following Expenditures Is Most Likely to Be