In a nutshell, this quotation refers to all income gained by either an individual partnership or a corporation that must be reported during income tax filing; this includes also appropriate deductions which are allowed by the internal revenue code. However, in every rule, there could be exceptions; such goes for deductions that are not allowed.
There are several expenses that are not deductible such as “Hobby Expenses and Losses” (IRS. ov, 2010), in which a taxpayer should prove that the endeavour has the purpose of “making a profit” before it can be declared that the expense could be deducted; some “Personal deductions unless expressly permitted and with various limitations” (Smith, Harmelink & Hasselback, 2008, p. 28), in which deductions permitted could be expense incurred, contribution to charities or any personal expense that may do overall good for the public; another personal expenses that can be deductible are “alimony, IRAs (limited), moving expenses, medical and dental fees and other personal or living expenses which is allowed under Code Sec. 62 (IRS. gov, 2010).
“Public Policy Restrictions” (Smith, Harmelink & Hasselback, 2008, p. 29) is another type of expense that is not deductible since the basis of this rule is that provisions of penalties and fines will be invalid due to the deductibility of such expense incurred on violations of public policies. Also according to Code Sec. 280 E Expenses incurred from illegal business are also not deductible, especially if it came from an “illegal payment” or money was used to purchase illegal substance like drugs. Deduction here is obviously not allowed.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 25 September 2016
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