Question

Which of the following would be a deductible business expense under IRC sec 162?

a. $ 30,000 in office rent paid on office for a self-employed business.

b. $ 750,000 paid to a corporate president / shareholder. $ 400,000 is what a typical salary would be.

c. $ 900 in political contributions to a politician.

d. $ 100 in a fine for the office sprinkler system not up to local code.

e. $ 500 in continuing education costs for a self-employed CPA.

f. A self-employed CPA paid $ 1,400 in classes in finance to obtain a brokerage license.

g. A self-employed lawyer’s payment of $ 1,200 in interest on a business vehicle used 90% for business.

h. A lawyer employed by a law firm paid $ 1,200 in interest on an auto loan he used 90% for business.

Answer 1

Hi

Answer is highlighted in Yellow: Solution: Answer: a. $ 30,000 in office rent paid on office for a self-employed business. b. $400,000 salary expense will be deductible. g. A self-employed lawyer's payment of $ 1,200 in interest on a business vehicle used 90% for business. Explanation: Because, under section 162, all ordinary and necessary expenses for business are deductible. Options d, e, fare personal expenses. option c and h are not deductible under section 162.