3. [LO 1] Q3 Whether a business expense is "reasonable in amount" is often a difficult question. Explain why determining reasonableness is difficult and describe a circumstance where reasonableness is likely to be questioned by the IRS. 4. [LO 2] Q5 What kinds of deductions are prohibited as a matter of public policy? Why might Congress deem it important to disallow deductions for expenditures against public policy? 5. [LO 2] Q6 Provide an example of an expense associated with the production of taxexempt income, and explain what might happen if Congress repealed the prohibition against deducting expenses incurred to produce tax-exempt income 6. [LO 21 Q7 (Research) Peggy is a rodeo clown, and this year she expended $1,000 on special "funny clothes and outfits. Peggy would like to deduct the cost of these clothes as work-related because she refuses to wear the clothes unless she is working. Under what circumstances can Peggy deduct the cost of her clown clothes? 7. [LO 1, L2] Q11 What expenses are deductible when a taxpayer combines both business and personal activities on a trip? How do the rules for international travel differ from the rules for domestic travel? 8. [LO 2] Q13 Describe the record-keeping requirements for business deductions expenses including mixed-motive expenditures. 9. [LO 2] Q14 Describe the computation of the limit placed on the business interest deduction. Is the disallowed interest ever deductible? 10. [LO 3) Q16 How do casualty loss deductions differ when a business asset is completely destroyed as opposed to the destruction of a personal-use asset