Tom Operates an Illegal Drug-Running Operation and Incurred the Following

Short Answer

Tom operates an illegal drug-running operation and incurred the following expenses:
$\begin{array}{lr}\text { Salaries } & \$ 75,000 \\\text { Illegal kickbacks } & 20,000 \\\text { Bribes to border guards } & 25,000 \\\text { Cost of goods sold } & 160,000 \\\text { Rent } & 8,000 \\\text { Interest } & 10,000 \\\text { Insurance on furniture and fixtures } & 6,000 \\\text { Utilities and telephone } & 20,000\end{array}$

Which of the above amounts reduces his taxable income?

A) $\$ 0$
B) $\$ 160,000$ .
C) $\$ 279,000$ .
D) $\$324,000$ .
E)None of the ahove