$33.$ Roberta is a self$-$employed accountant. During the year,

Roberta incurs the following unreimbursed expenses:

Item Amount

Travel to client locations $$750$

Subscriptions to professional journals $215$

Taking potential clients to lunch $400$

Photocopying $60$

$$1,425$

Identify which of these expenses are deductible and the amount that is deductible by

Roberta. Indicate whether they are deductible for or from AGI.

$38.$Damian Corporation is engaged in the business of purchasing and

importing carpets. The carpets are imported from a country which the U$.$S$.$ has banned as

a source of imports. Following is a list of income and expense items for the year:

Item Amount

Sales $$750,000$

Cost of goods sold $270,000$

Salaries $75,000$

Freight $22,500$

Bribes to customs officials $30,000$

Lease payments on warehouses $15,000$

Interest expense $12,000$

a$.$ What is the taxable income of Damian Corporation from the illegal business activity?

b$.$ Assume the same facts as in Part a except that Damian$$s business consists of buying

and selling illegal drugs. What is Damian$$s taxable income from this illegal business

activity?