Question

Alex paid a traffic ticket received while he was double parked to attend a business meeting. How would he treat this amount for Federal individual income tax purposes?

Answer 1

Alex cannot deduct the traffic ticket paid for double parking as fines and penalties paid to a government for the violation of any law are not deductible for Federal individual income tax purposes.

Step-by-step explanation:

Alex's traffic ticket paid for double parking during a business meeting cannot be deducted for Federal individual income tax purposes. Generally, fines and penalties paid to a government are not deductible as they are not considered necessary or ordinary expenses for carrying on a trade or business.

The Internal Revenue Code specifically prohibits deductions for fines or penalties paid to a government for the violation of any law. This includes amounts paid as settlement of actual or potential liability for a fine or penalty, whether civil or criminal.

For example, the corporate income tax on his profits and individual income tax on his salary are legitimate federal tax considerations, but expenses for illegal activities are not.