Rex, a Cash Basis Calendar Year Taxpayer, Runs a Bingo

question 162

Multiple Choice

Rex, a cash basis calendar year taxpayer, runs a bingo operation which is illegal under state law.During 2017, a bill designated H.R.9 is introduced into the state legislature which, if enacted, would legitimize bingo games.In 2017, Rex had the following expenses:a $$\begin{array} { l r } \text { Operating expenses in conducting bingo games } & \$ 247,000 \\\text { Payoff money to state and local police } & 24,000 \\\text { Newspaper ads supporting H.R. 9 } & 3,000 \\\text { Political contributions to legislators who support H.R. 9 } & 8,000\end{array}$$ Of these expenditures, Rex may deduct:

• A)$247,000.
• B)$250,000.
• C)$258,000.
• D)$282,000.
• E)None of the above.

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Definitions:

Hearing Loss

A partial or total inability to hear, which can occur in one or both ears.

Eardrum

A thin membrane that separates the external ear from the middle ear and vibrates in response to sound waves.

Elderly Patient

A term used to describe an individual, typically over the age of 65, who may require special medical care due to aging-related health issues.

Bronchovesicular

Refers to sounds made by air moving through the bronchial tubes and alveoli, typically heard with a stethoscope during a medical exam.