Three Requirements Must Be Met in Order to Deduct a Trade

Multiple Choice

Three requirements must be met in order to deduct a trade or business expense. Also, deductible trade or business expenses may not be which of the following:
I.a capital expenditure.
II.reasonable in amount.
III.a payment that frustrates public policy.
IV.an expense related to tax-exempt income.
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A) Only statement I is correct.
B) Only statement II is correct.
C) Statements III and IV are correct.
D) Statements I, II, and III are correct.
E) Statements I, III, and IV are correct.