List those criteria necessary for an expenditure to be deductible as business or investment expenses.
What will be an ideal response?
To be deductible as business or investment expenses, an expenditure must be:
1. Related to a profit-motivated activity of the taxpayer
2. Ordinary
3. Necessary
4. Reasonable in amount
5. Properly documented
6. An expense of the taxpayer.
In addition, the expense must not be:
1. A capital expenditure
2. Related to tax-exempt income
3. Illegal or in violation of public policy
4. Specifically disallowed by tax law.
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