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

(A) True
(B) False

A) True

Explanation:

Business expenses are legitmate expenses made by an entreprenuer in the cause of his or her running of his business. Illegal and kickbacks are not legitmate expenses as a result of the nature in which it is carried out. Imagine a situation where someone is supposed to pay his personal income tax that amount to $5000 but decided to pay bribe worth $2000. There is clearly cheating and most government frowns heavily on it.

On the other hand, fines imposed by a governmental unit on a business could be deductible as a result of it being a legitimate transction that is backed up by law.

answerunconscious mind;