Merchants and professionals may deduct the following expenses,
subject to certain limitations and requirements: 
- Accounting fees
- Advertising
- Appraisal costs (unless for acquisition of property)
- Attorney fees
- Automobile and truck expenses (prorated between business and
personal), including automobile club membership, automobile loan
interest, casualty loss (uncompensated damages), gasoline tax,
gasoline, insurance judgment for negligent driving, loss on sale
of automobile, lubrication and oil, parking, repairs, tires (life
of less than one year), and washing
- Bad debts
- Bonuses and awards
- Chamber of commerce dues
- Child-care expenses of employees ($5,000 maximum)
- Commissions
- Computer software costs (purchased or leased)
- Conventions (expenses of attending)
- Depreciation on furniture and fixtures
- Entertainment (80 percent maximum)
- Exploration costs
- Garbage removal
- Gifts for customers (limited to $25 per individual per year)
- Insurance
- Interest
- License fees
- Life insurance ($50,000 maximum for group term coverage for
employees)
- Liquidated damages under Fair Labor Standards Act
- Machinery repairs and replacement of parts without prolonging
life
- Meals and lodging furnished to employees (80 percent maximum)
- Mortgage prepayment penalty
- Moving expenses of employees
- Night-watch service
- Painting
- Picnics, dances, and entertainment for employees
- Political contributions
- Porter and janitor service
- Postage
- Rent
- Repairs to business property
- Research and exploration costs
- Salaries
- Stationery (letters, bills, envelopes, cards)
- Supplemental unemployment benefit plans
- Tax return preparation
- Taxes (employment, excise, and real estate)
- Telephone
- Theft losses (not compensated by insurance)
- Utilities
- Vacation pay
- Wages (if ordinary, necessary, reasonable, for services performed,
and actually paid or incurred)
If they sell the stock at a profit in a few years, they will get
tax-sheltered capital gains treatment. On the other hand, if the
investment fails, the investor can write off up to $100,000 on a
joint return and $50,000 on a separate return. The write-off is
applied against ordinary income.
- the majority of the income is from business operations,
- the stock is issued for money or property (other than securities),
and
- your corporation has $1 million or less in paid-in capital
when the stock is issued.
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