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?
$\begin{array}{lr}\text { Income }&\$200,000\
\text { Expenses: }\
\text { Rent } & 8,000 \
\text { Utilities } & 2,000 \
\text { Bribes to police } & 10,000 \
\text { Medical expense } & 5,000 \
\text { Legal fees } & 20,000 \
\text { Depreciation } & 14,000 \
\text { Illegal kickbacks } & 15,000
\end{array}$

Question

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?
 $\begin{array}{lr}\text { Income }&\$200,000\
\text { Expenses: }\
\text { Rent } & 8,000 \
\text { Utilities } & 2,000 \
\text { Bribes to police } & 10,000 \
\text { Medical expense } & 5,000 \
\text { Legal fees } & 20,000 \
\text { Depreciation } & 14,000 \
\text { Illegal kickbacks } & 15,000
\end{array}$

Quizplus · Accepted Answer

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?
 $\begin{array}{lr}\text { Income }&\$200,000\
\text { Expenses: }\
\text { Rent } & 8,000 \
\text { Utilities } & 2,000 \
\text { Bribes to police } & 10,000 \
\text { Medical expense } & 5,000 \
\text { Legal fees } & 20,000 \
\text { Depreciation } & 14,000 \
\text { Illegal kickbacks } & 15,000
\end{array}$

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