Tom Paul owns a large construction company. He is wondering
which expenses can be deducted and which are not allowed. The
overall goal is to reduce his tax liability. Below are facts listed
from his recent business activity:
He just bought two new dump trucks that will be used fully for
his construction business and one new pick-up truck that he will
use at each construction site but also acts as his personal
vehicle
Similarly, he just bought new parts to improve the useful life
of one of his old dump trucks and additionally purchased
short-lived parts to fix one of his jackhammers
Tom also just filled in potholes that were in the road that led
to his business headquarters because they were causing damage to
the wheels of his trucks
Tom had one of his employees get injured last year on the job
and is currently paying sick leave for that individual
Lastly, Tom is paying for advertising in a newspaper to
see if he can gain some additional business in the residential home
industry (and has been unsuccessful in acquiring contracts)
because, as of right now, Billy works almost exclusively in the
commercial real estate industry
In all these situations, Tom is unsure whether he can
deduct these expenses from his business tax return. Furthermore,
some situations listed above may be allowed, but are they ethical
in nature? Why, explain