Using the Tests for Deductibility Discussed in Chapter 5,explain Why

question 97

Essay

Using the tests for deductibility discussed in Chapter 5,explain why the following expenses are not deductible.
a.Mel is a sprint car racer.He does repair and maintenance on his cars in the garage at his home.After repairing the cars,he tests them on city streets.He received 15 citations (totaling $2,900)for speeding,running stop signs,and reckless driving.
b.Albert,a carpenter,pays his 10-year-old son $150 a week to empty waste cans in his work shop.Albert's son works each evening and two hours on Saturday morning.
c.Sharon contributes $25 to a local organization that is campaigning against a foreign trade bill.The legislation would damage Sharon's business.
d.Marline borrows $5,000 and pays $500 in interest.The loan is used to purchase bonds issued by the City of Lafayette School District.
e.Christine is the wife of a physician,and she is an experienced horseman.She has raised horses for ten years and occasionally shows them for prize money.She also boards horses for monthly fees.She enjoys her horse activity but has never made a profit in any year.Her horses are appraised at $200,000.

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Definitions:

Medicine

The science and practice of diagnosing, treating, and preventing disease and injury in humans and animals.

Telescope

An optical instrument designed to make distant objects appear closer and more detailed by using lenses or mirrors, crucial for astronomical observations and discoveries.

Censorship

The suppression or prohibition of any parts of books, films, news, etc. that are considered obscene, politically unacceptable, or a threat to security.

Scientific Thought

Scientific thought is a systematic way of understanding the natural world based on observation, experimentation, and evidence, challenging existing knowledge and beliefs through rigorous questioning.