Kitty runs a brothel (illegal under state law) and has the following items of income and expense. What is the amount that she must include in taxable income from her operation? $\begin{array}{lr}\text { Income }&\$200,000\\text { Expenses: }\
\text { Rent } & 8,000 \
\text { Utilities } & 2,000 \
\text { Bribes to police } & 10,000 \
\text { Office supplies } & 5,000 \
\text { Legal fees } & 20,000 \
\text { Depreciation } & 14,000 \
\text { Illegal kickbacks } & 15,000
\end{array}$

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The Answer of Kitty runs a brothel (illegal under state law) and has the following items of income and expense. What is the amount that she must include in taxable income from her operation? $\begin{array}{lr}\text { Income }&\$200,000\\text { Expenses: }\
\text { Rent } & 8,000 \
\text { Utilities } & 2,000 \
\text { Bribes to police } & 10,000 \
\text { Office supplies } & 5,000 \
\text { Legal fees } & 20,000 \
\text { Depreciation } & 14,000 \
\text { Illegal kickbacks } & 15,000
\end{array}$

Kitty Runs a Brothel (Illegal Under State Law) and Has