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:

Heat

A form of energy that is transferred between systems or objects with different temperatures, flowing from the hotter system to the cooler one.

Organic Matrix

The non-mineral component of bones and teeth, comprising collagens and other organics, which gives them flexibility and tensile strength.

Acid

A substance that releases hydrogen ions (H+) in solution, characterized by a sour taste, ability to turn blue litmus paper red, and ability to react with bases to form salt and water.

Unravels Proteins

A process by which proteins are broken down into their constituent amino acids or peptides, typically through the action of enzymes or chemicals.