Question

The lone exception for business expenses is ___ ___ ___ ___ which are not deductible.

A) Meals and Entertainment
B) Capital Expenditures
C) Home Office Expenses
D) Employee Compensation

Answer 1

The lone exception for deductible business expenses is Meals and Entertainment, which face strict deductibility rules after the Tax Cuts and Jobs Act of 2017.

Step-by-step explanation:

The question poses a scenario regarding the deductibility of certain types of business expenses. Specifically, it asks which category of expenses is the lone exception, meaning they are not deductible. The correct answer is A) Meals and Entertainment, as the Tax Cuts and Jobs Act of 2017 dramatically limited the deductibility of these expenses. Typically, businesses can deduct ordinary and necessary expenses incurred in the course of conducting business. However, the costs for meals and entertainment have come under stricter rules; while some meal expenses might still be partially deductible if they meet certain criteria, entertainment expenses are no longer deductible.