Troy incurs the following expenses in his business (illegal gambling establishment): His deductible expenses are

Question

Troy incurs the following expenses in his business (illegal gambling establishment):  His deductible expenses are

Quizplus · Accepted Answer

Based on the given expenses, Troy can only deduct the expenses that are ordinary and necessary for his illegal gambling establishment. Therefore, the deductible expenses would be $70,000 (wages) + $260,000 (rent and utilities expenses) = $330,000. Option A is incorrect because Troy has deductible expenses. Option B is incorrect because the deductible expenses are not equal to the total expenses incurred. Option D is incorrect because it includes non-deductible expenses such as bribes and illegal payments.

Troy Incurs the Following Expenses in His Business (Illegal Gambling