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Test Bank for McGraw Hill's Essentials of Federal Taxation 2025 Edition Evergreen Release by Brian Spilker | Chapter 9 to 17 CA$42.79   Add to cart
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Test Bank for McGraw Hill's Essentials of Federal Taxation 2025 Edition Evergreen Release by Brian Spilker | Chapter 9 to 17
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Test Bank for McGraw Hill's Essentials of Federal Taxation 2025 Edition Evergreen Release by Brian Spilker | Chapter 9 to 17 are included in this document however Complete Chapters are given in Package Deal of this document. PART III: BUSINESS-RELATED TRANSACTIONS 9 Business Income, Deductions...

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  • September 3, 2024
  • 719
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • mcgraw hills
  • essentials
  • federal
  • taxation
  • 2025
  • edition
  • evergreen release
  • spilker
  • ayers
  • quiz bank
  • practice questions
  • test bank
  • exam bank

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  • Taxation

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Chapter 09 2025 Edition


1. Award: 10.00 points




The Internal Revenue Code authorizes deductions for trade or business activities if the expenditure is
"ordinary and necessary."


 True

 False




References

True / False Difficulty: 1 Easy Learning Objective: 09-01 Identify common
business deductions.



2. Award: 10.00 points



Business activities are distinguished from personal activities in that business activities are motivated by
the pursuit of profits.


 True

 False




References

True / False Difficulty: 1 Easy Learning Objective: 09-01 Identify common
business deductions.

,3. Award: 10.00 points




The phrase "ordinary and necessary" has been defined to mean that an expense must be essential and
indispensable to the conduct of a business.


 True

 False




A necessary expense is an expense that is helpful or conducive to the business activity.


References

True / False Difficulty: 2 Medium Learning Objective: 09-01 Identify common
business deductions.



4. Award: 10.00 points




Reasonable in amount means that expenditures can be exorbitant if the activity is motivated by profit.


 True

 False




References

True / False Difficulty: 2 Medium Learning Objective: 09-01 Identify common
business deductions.

,5. Award: 10.00 points



The test for whether an expenditure is reasonable in amount is whether the expenditure was for an
"arm's length" amount.


 True

 False




References

True / False Difficulty: 2 Medium Learning Objective: 09-01 Identify common
business deductions.



6. Award: 10.00 points




Illegal bribes and kickbacks are not deductible business expenses, but fines imposed by a
governmental unit are deductible as long as the fines are incurred in the ordinary course of business.


 True

 False




No deductions are allowed for expenditures that are against public policy.


References

True / False Difficulty: 2 Medium Learning Objective: 09-02 Determine the
limits on deducting business expenses.

, 7. Award: 10.00 points




Although expenses associated with illegal activities are not deductible, political contributions can be
deducted if the donation is not made to a candidate for public office.


 True

 False




References

True / False Difficulty: 1 Easy Learning Objective: 09-02 Determine the
limits on deducting business expenses.



8. Award: 10.00 points



When a taxpayer borrows money and invests the loan proceeds in municipal bonds, the interest paid by
the taxpayer on the debt will not be deductible.


 True

 False




References

True / False Difficulty: 2 Medium Learning Objective: 09-02 Determine the
limits on deducting business expenses.

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