Question

Indicate the amoun (if any) that she can deduct as an ordinary and necessary business deduction in the situation:

Michelle moves her food truck between various locations on a daily rotation. Last week, Michelle was stopped for speeding. She paid a fine of $220 for speeding, including $175 for legal advice in connection with the ticket.

Answer 1

Answer:

The correct answer is $175.

Explanation:

According to the scenario, Michelle has paid a fine of $220 including for legal advice.

Ordinary and necessary business deduction can only deduct the expenditures related to business.

• As fine is not a business expenditure hence it can not be deducted.
• Legal advice can be deducted as a business expenditure.

Hence, she can deduct $175 as an ordinary and necessary business deduction.