ate law. During 2020, a bill designated H.R. 9 is introduced into the state legislature, nich, if enacted, would legitimized bingo games. In 2020, Rex had the following expens $247,0 perating expenses in conducting bingo games yoff money to state and local police 24,C 3,C ewspaper ads supporting H.R. 9 litical contributions to legislators who support H.R. 9 8,C these expenditures, Rex may deduct: $ 247.000.

SWFT Individual Income Taxes
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ISBN:9780357391365
Author:YOUNG
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Chapter20: Corporations And Parterships
Section: Chapter Questions
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26. Rex, a cash basis calendar year taxpayer, runs a bingo operation that is illegal under
state law. During 2020, a bill designated H.R. 9 is introduced into the state legislature,
which, if enacted, would legitimized bingo games. In 2020, Rex had the following expenses:
$247,000
Operating expenses in conducting bingo games
Payoff money to state and local police
24,000
Newspaper ads supporting H.R. 9
3,000
Political contributions to legislators who support H.R. 9
8,000
Of these expenditures, Rex may deduct:
a. $ 247,000.
b. $ 250,000.
c. $ 258,000.
d. $ 282,000.
e. None of these.
Transcribed Image Text:26. Rex, a cash basis calendar year taxpayer, runs a bingo operation that is illegal under state law. During 2020, a bill designated H.R. 9 is introduced into the state legislature, which, if enacted, would legitimized bingo games. In 2020, Rex had the following expenses: $247,000 Operating expenses in conducting bingo games Payoff money to state and local police 24,000 Newspaper ads supporting H.R. 9 3,000 Political contributions to legislators who support H.R. 9 8,000 Of these expenditures, Rex may deduct: a. $ 247,000. b. $ 250,000. c. $ 258,000. d. $ 282,000. e. None of these.
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