Which of the Following Business Expense Deductions Is Most Likely

question 24

Multiple Choice

Which of the following business expense deductions is most likely to be unreasonable in amount?

• A) Compensation paid to the taxpayer's spouse in excess of salary payments to other employees.
• B) Amounts paid to a subsidiary corporation for services where the amount is in excess of the cost of comparable services by competing corporations.
• C) Cost of entertaining a former client when there is no possibility of any future benefits from a relation with that client.
• D) All of these are likely to be unreasonable in amount.
• E) None of these is likely to be unreasonable in amount.

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Definitions:

Veins Overstretching

A condition where veins are stretched beyond their normal capacity, often leading to varicose veins.

Posterior Cerebral

Pertaining to the back part of the cerebral cortex, which is involved in processing visual information.

Cerebral Cortex

The outer layer of the cerebrum in the brain, involved in many higher-level brain functions including thought, memory, and consciousness.

Abdominal Aorta

The largest artery in the abdomen that supplies blood to many of the abdominal and pelvic organs as well as the legs.