Pamela Was an Officer in Green Restaurant Which Subsequently Went

question 55

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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Definitions:

Monopolies and Trusts

Economic structures or arrangements where a single entity or a group controls a significant portion of market share, limiting competition.

Yellow Dog Contracts

Employment agreements where workers pledge not to join or support a labor union during their period of employment, illegal in many jurisdictions.

National Industrial Recovery Act

A 1933 U.S. legislation aimed at boosting economic growth during the Great Depression through industrial codes of fair competition and promoting the establishment of labor standards.

Unconstitutional

Actions, laws, or policies that do not conform to the principles or provisions outlined in a country's constitution, thus deemed invalid or illegal.