Oscar Drives a Taxi on Weekends

question 31

Multiple Choice

Oscar drives a taxi on weekends. In maximizing the amount of fares he earns, he occasionally gets tickets for speeding. Oscar figures that as long as he keeps his traffic violations under $100 over a weekend, he can more than offset those costs with additional fares. What is/are the tax effect(s) of Oscar's speeding ticket costs?

• A)The costs are deductible because they are ordinary and necessary expenses directly related to the business.
• B)The costs are deductible because they have a business purpose and the business is not illegal.
• C)The costs are not deductible because the business activity is illegal.
• D)The costs are not deductible because they are due to violations of law.