Terry and Jim Are Both Involved in Operating Illegal Businesses

question 151

Multiple Choice

Terry and Jim are both involved in operating illegal businesses. Terry operates a gambling business and Jim operates a drug running business. Both businesses have gross revenues of $500,000. The businesses incur the following expenses.
Which of the following statements is correct?

• A)Neither Terry nor Jim can deduct any of the above items in calculating the business profit.
• B)Terry should report profit from his business of $250,000.
• C)Jim should report profit from his business of $500,000.
• D)Jim should report profit from his business of $250,000.
• E)None of the above.

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Definitions:

Nocturnal

Describes organisms that are active during the night and rest during the day.

Crepuscular

Describing organisms that are most active during the twilight periods at dawn and dusk.

Circadian Rhythm

Circadian rhythm refers to the natural, internal process that regulates the sleep-wake cycle and repeats roughly every 24 hours.

Long-Term Change

A significant modification or transformation that occurs over an extended period, impacting environments, societies, or biological evolution.