Which of the Following Business Expense Deductions Is Most Likely

question 15

Multiple Choice

Which of the following business expense deductions is most likely to be unreasonable in amount?

• A) Cost of entertaining a former client when there is no possibility of any future benefits from a relation with that client.
• B) Compensation paid to the taxpayer's spouse in excess of salary payments to other employees.
• C) Amounts paid to a subsidiary corporation for services where the amount is in excess of the cost of comparable services by competing corporations.
• D) All of the choices are likely to be unreasonable in amount.
• E) None of the choices are likely to be unreasonable in amount.

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Definitions:

Psychosocial

relating to the interrelation between social factors and individual thought and behavior.

Psychosocial Development

A theory proposed by Erik Erikson, describing how individuals’ social experiences across their lifespan shape their personality, including their emotions and attitudes towards themselves and others.

Cognitive Development

concerns the growth and change in intellectual capabilities such as learning, thinking, reasoning, and problem-solving.

Motor Efforts

Activities requiring physical movement and coordination of muscles and limbs.