Joshua hired his brothers firm to provide accounting services, to his business. During the current year, Michael paid his brothers firm $82,000 for services even though other firms were willing to provide the same services for $40,000. How much of this expenditure, if any, is deductible as an ordinary and necessary business expenditure?© BrainMass Inc. brainmass.com June 4, 2020, 12:32 am ad1c9bdddf
Since, according to the question, the generally accepted expense for these particular accounting services is $40,000, that is all that is deductible. If, however, the service provided ...
This solution provides an analysis of a given accounting scenario. The scenario involves a business owner who hires his brother to provide service at a cost above market, and the solution explains what of these expenses are deductible.