Arthur is a truck driver who owns his own business. He has been on the road for several months, and the constant wear and tear on his truck results in the need for several major mechanical repairs. This generates a loss for his business. Which of the following reflects how this will affect Arthur's tax obligation?
A)Arthur's tax obligation will be increased.
B)Arthur's tax obligation will be reduced.
C)Arthur's tax obligation will not change at all.
D)Arthur will not be required to pay his tax obligation.

Question

Quizplus · Accepted Answer

Arthur's tax obligation will be reduced because the expenses from the mechanical repairs can be deducted as business expenses, reducing his taxable income.

Arthur Is a Truck Driver Who Owns His Own Business