Hal Capone owns several businesses in the downtown area. One business he owns is a restaurant that also provides illegal cash laundering services. Hal had the following tax items this year:

a. Which expenses can Hal deduct from the pawn shop and cash laundering services?

b. If Hal’s business was drug trafficking rather than cash laundering, what expenses would be deductible?

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Revenue Cost of goods sold Wages paid Depreciation Utilities Office expense $780,000 $330,000 $190,000 $ 36,000 $ 1,800 $ 750 Accounting fee $ 2,250