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.

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Definitions:

Host-Country National

An employee who is a citizen of the country where a multinational company’s branch or subsidiary is located, as opposed to being from the company's home country.

Multinational Corporation

A company that operates in several countries but manages its operations from one (home) country.

Canada

A country located in the northern part of North America, known for its diverse landscapes and multicultural population.

British Columbia

A province located on the west coast of Canada, known for its natural beauty, including mountains, forests, and the Pacific coastline.