Troy Incurs the Following Expenses in His Business,an Illegal Gambling

question 66

Multiple Choice

Troy incurs the following expenses in his business,an illegal gambling establishment: $$\begin{array} { | l | r | } \hline \text { Salaries to employees } & \$ 200,000 \\\hline \text { Insurance expense } & 60,000 \\\hline \text { Utilities expense } & 70,000 \\\hline \text { Bribes to police } & 50,000 \\\hline\end{array}$$ His deductible expenses are

• A)$0.
• B)$200,000.
• C)$330,000.
• D)$380,000.

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Definitions:

Charter of the Corporation

A legal document issued by a governmental authority that establishes a corporation and outlines its basic terms of operation, rights, and responsibilities.

Initial Directors

Initial directors are the first members of a corporation's board of directors, appointed at the time of incorporation to serve until the first shareholders' meeting.

Incorporator

The individual or entity responsible for creating and filing the necessary documentation to legally form a corporation with the state.

De Facto Corporation

A business entity that operates as if it were a corporation although it has not completed the legal formalities for incorporation, and may be treated as a corporation by courts.