Asked by Donna Pollock on Jun 03, 2024
Verified
Which of the following is not a "trade or business" expense?
A) Mortgage interest on a warehouse.
B) Depreciation on business equipment.
C) Mortgage interest on a personal residence.
D) Cost of goods sold.
Trade Or Business
Engagements or activities conducted for the purpose of income or profit, characterized by continuity and regularity.
Mortgage Interest
The interest charged on a loan used to purchase a property, often tax-deductible for the borrower.
Depreciation
An accounting method that allocates the cost of a tangible asset over its useful life.
- Identify what constitutes a trade or business expense.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
C
Explanation :
Mortgage interest on a personal residence is not a "trade or business" expense as it is related to the taxpayer's personal residence and not their business operations. The other options, including mortgage interest on a warehouse, depreciation on business equipment, and cost of goods sold, are all considered legitimate "trade or business" expenses.
Learning Objectives
- Identify what constitutes a trade or business expense.