Pamela Was an Officer in Green Restaurant Which Subsequently Went

question 134

Multiple Choice

Pamela was an officer in Green Restaurant which subsequently went bankrupt.Pamela started a new restaurant and,to establish goodwill,paid off the debts of $100,000 of Green Restaurant.She was under no obligation to do so.The $100,000 is

• A)deductible currently as an itemized deduction.
• B)capitalized because the expenses are not ordinary.
• C)deductible currently as a trade or business expense since the expenses are considered ordinary and necessary business expenses.
• D)None of the above.

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