Which of the following business expense deductions is most likely to be unreasonable in amount?
A) Compensation paid to the taxpayer's spouse in excess of salary payments to other employees.
B) Amounts paid to a subsidiary corporation for services where the amount is in excess of the cost of comparable services by competing corporations.
C) Cost of entertaining a former client when there is no possibility of any future benefits from a relation with that client.
D) All of the choices are likely to be unreasonable in amount.
E) None of the choices are likely to be unreasonable in amount.

Question

Quizplus · Accepted Answer

All the choices provided could be considered unreasonable because they involve payments or expenses that exceed what would typically be considered necessary or appropriate for the business purpose.

Which of the Following Business Expense Deductions Is Most Likely