Question

As a Tax Professional, you interview a taxpayer, Roger, who had new business activity in 2016. He has receipts to substantiate all his expenses during the year. What information would you share with Roger about deducting his business expenses?

His expenses should be common and accepted in his field of business.

His expenses should be helpful and appropriate for his business.

The costs of purchasing certain assets with a life of one year or more must be recovered over a period of time.

All of these are appropriate statements to share with the taxpayer.

Answer 1

Answer is option D

All of these are appropriate statements to share with the taxpayer.

Explanation :

Business expense to be substanstiate must be ordinary, necessary, and reasonable. Ordinary expenses are common and accepted in business. Necessary expenses are helpful and appropriate for running business.