Which of the Following Payments Are Deductible

question 27

Multiple Choice

Which of the following payments are deductible?
I.Wilcox pays $1,000 to run an ad in the program of the state Independent Party convention
II.Wilcox is in the construction business. In January, he sends his chief financial officer to Washington, D.C., to monitor current legislation affecting the real estate industry. Expenses totaled $2,100.
III.In March, Wilcox personally travels to Washington, D.C., to testify before the banking subcommittee on the effects of proposed legislation on the construction industry. Expenses totaled $2,300.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Only statement III is correct.
• D)Statements II and III are correct.
• E)Statements I and II are correct.

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Definitions:

Corporate Taxes

Taxes imposed on the income or profit of corporations by the government.

Personal Taxes

Taxes imposed on individuals or households based on their income, investments, or other personal activities.

Financial Distress

A situation where a company cannot meet or has difficulty paying off its financial obligations to its creditors.

Debt Financing

The method by which a firm raises capital through the sale of fixed income products, such as bonds or loans, committing to regular payments.