____ 30. Rex, a cash basis calendar year taxpayer, runs a bingo operation which is illegal under state law. During 2016, a bill designated H.R. 9 is introduced into the state legislature which, if enacted, would legitimize bingo games. In 2016, Rex had the following expenses:

Operating expenses in conducting bingo games	$127,000
Payoff money to state and local police	34,000
Newspaper ads supporting H.R. 9	13,000
Political contributions to legislators who support H.R. 9	18,000

Of these expenditures, Rex may deduct: Please select the correct answer and why (include a brief description).

a.	$127,000.
b.	$214,000.
c.	$227,000.
d.	$282,000.
e.	None of the above.