The test for whether an expenditure is reasonable in amount is whether the expenditure was for an "arm's length" amount.

Name: The test for whether an expenditure is reasonable in amount is whether the expenditure was for an "arm's length" amount.
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An expenditure is considered reasonable in amount if it was for an "arm's length" amount, meaning it was a fair market price that two unrelated parties would agree upon.

The Test for Whether an Expenditure Is Reasonable in Amount