Basic Federal Income Taxation: Deductions: Trade or Business Deductions

This lesson will guide users through the types of expenses that can be deducted as business or trade costs, including cost of repairs versus capital expenditures.

Learning Outcomes

On completion of the lesson, the student will be able to:

1. Give examples of "ordinary and necessary" business expenses.
2. Provide examples of costs that are capitalized expenditures rather than deductible business expenses, including repairs.
3. Explain when job-seeking costs are deductible under § 162.
4. Explain the difference in treatment under § 162 between expanding an existing business and entering into a new business.