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Tom Operates An Illegal Drug-Running Operation And Incurred The Following Expenses:

ses: ¥ Salaries $ 75,000 ¥ Illegal kickbacks 20,000 ¥ Bribes to border guards 25,000 ¥ Cost of goods sold 160,000 ¥ Rent 8,000 ¥ Interest 10,000 ¥ Insurance on furniture and fixtures6,000 ¥ Utilities and telephone 20,000 Which of the above amounts reduces his taxable income? a. $324,000. b. $160,000. c. $279,000. d. $0. e. None of these choices are correct.
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b. $160,000. He's a drug dealer so nothing else can be deducted except COGS.

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