1. Allowable deductions generally refer to amounts that are subtracted directly from one's total tax liability. 2. Deductions which constitute bribe, kickback, and other similar payment made to an official or employee of the national, local or foreign government or similar entities, being against law and public policy are not deductible from gross income. A= 1st statement is true, second statement is false. B= 1st statement is false, second statement is true. C= Both statements are false. D- Both statement are true.

3 What is income tax payable? O A company's liability, based on profitability, that is paid in advance to the government O A payment to a company, based on profitability, that is paid in advance from the government A payment to a company, based on profitability, to be paid from the government O A company's liability, based on profitability, to be paid to the government

Explain the significance of Lucas v. Earl and Helvering v. Horst. C O A. Lucas v. Earl, the Supreme Court held that earnings from labor are taxed to the person who performs the services rather than the person who receives the income. In Helvering v. Horst, the Supreme Court held that income from property is taxed to the person who owns the property rather than the person who receives the income. One cannot assign income by arranging to have payment made to another person. O B. Lucas v. Earl, the Supreme Court held that income from property is taxed to the person who owns the property rather than the person who receives the income. Helvering v. Horst, the Supreme Court held that earnings from labor are taxed to the person who performs the services rather than the person who receives the income. OC. Helvering v. Horst, the Supreme Court held that earnings from labor are taxed to the person who performs the services rather than the person who receives the income. Lucas v. Earl, the…

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