Terry and Jim are both involved in operating illegal businesses.Terry operates a gambling business and Jim operates a drug-running business.Both businesses have gross revenues of $500,000.The businesses incur the following expenses. Which of the following statements is correct?
A)Neither Terry nor Jim can deduct any of these items in calculating the business profit.
B)Terry should report profit from his business of $250,000.
C)Jim should report profit from his business of $500,000.
D)Jim should report profit from his business of $250,000.
E)None of these.

Question

Terry and Jim are both involved in operating illegal businesses.Terry operates a gambling business and Jim operates a drug-running business.Both businesses have gross revenues of $500,000.The businesses incur the following expenses.  Which of the following statements is correct?
A)Neither Terry nor Jim can deduct any of these items in calculating the business profit. 
B)Terry should report profit from his business of $250,000. 
C)Jim should report profit from his business of $500,000. 
D)Jim should report profit from his business of $250,000. 
E)None of these.

Quizplus · Accepted Answer

The Answer of Terry and Jim are both involved in operating illegal businesses.Terry operates a gambling business and Jim operates a drug-running business.Both businesses have gross revenues of $500,000.The businesses incur the following expenses.  Which of the following statements is correct?
A)Neither Terry nor Jim can deduct any of these items in calculating the business profit. 
B)Terry should report profit from his business of $250,000. 
C)Jim should report profit from his business of $500,000. 
D)Jim should report profit from his business of $250,000. 
E)None of these.

Terry and Jim Are Both Involved in Operating Illegal Businesses