Question
How would you explain the tax law related to the deductibility of expenses to Sam? According to 26 US Code 162, deductions are allowed for
How would you explain the tax law related to the deductibility of expenses to Sam?
According to 26 US Code 162, deductions are allowed for ordinary and necessary expenses paid during that tax year that were needed to carry out or operate the business. Which include salaries, traveling expenses, rent/payments for property that is owned by the business
Why are some expenses not deductible?
Any expenses that include items used primarily for personal, living, or family are not deductible. Also, you cant deduct the cost of acquisition, construction, improvement, or restoration if you expect to have it for more than one year. However, there are some ways to apply capital expenditure under IRC 263.
Provide an example of an expense to support your response.
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