Explore BrainMass

Arrow Inc: Business expenditures deductible or nondeductible

Which of the following trade or business expenditures of Arrow Inc.
are deductible on its current year tax return? If an expenditure is
not deductible, explain why it is not a valid deduction

Salaries and wages to employees $400,000
Purchase of new office building $250,000
Payment of illegal parking fines of president $1,400
Payment of wedding expenses for President's
daughter's wedding $16,000
Entertainment, expenses related to company business $25,000
Interest on money borrowed to buy tax-exempt securities $9,000

Total Expenditures $700,400

Solution Summary

The detailed solution explains whether each of the items are tax deductible including reasons why some of the expenses are not allowable.