Various criteria will disqualify the deduction of a business or investment related expenditure. Which of the following criteria will not disqualify a business or investment expenditure?
A) capital expenditure
B) expenses related to tax-exempt income
C)expenses are not incurred annually
D)expenses are illegal or in violation of public policy

Question

Various criteria will disqualify the deduction of a business or investment related expenditure. Which of the following criteria will not disqualify a business or investment expenditure? 
A) capital expenditure
B) expenses related to tax-exempt income
C)expenses are not incurred annually
D)expenses are illegal or in violation of public policy

Quizplus · Accepted Answer

Expenses not incurred annually do not automatically disqualify them from being deductible, as long as they are ordinary, necessary, and directly related to the business or investment activity.

Various Criteria Will Disqualify the Deduction of a Business or Investment