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Discuss the deductibility of the $70 000 expense for Paper Co (4 marks). Paper Co (the taxpayer) imports and manufactures specialty paper products...

1.

Discuss the deductibility of the $70 000 expense for Paper Co (4 marks).


Paper Co (the taxpayer) imports and manufactures specialty paper products for printing and

design. In 2018, Paper Co was required to defend itself and its directors in legal

proceedings.

Paper Co had been charged criminally with paying bribes to officials

to allow them

to import certain paper products from Indonesia. The charges were eventually dropped against

Paper Co, but

Top Answer

for this situation the legal costs of $40,000 that was incurred by the taxpayer can be deducted as an expense for the... View the full answer

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