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Discuss whether the following expenditures meet the ordinary, necessary, and reasonable requirements:
a. Sadie owns 5 shares of Megaconglomerate stock. She spent $4,000 to attend the annual shareholders' meeting.
b. Sam runs a successful medical practice. Because he has a substantial investment portfolio, he spent $3,000 to attend a seminar on investing strategies.
c. Alana is a self-employed tax attorney. She spent $3,000 to attend the American Insti- tute of Certified Public Accountants' annual conference on income tax developments.
d. Kevin owns a large ranching operation. He is deeply religious and feels it is impor- tant that his employees have access to religious counseling. He hired an ordained minister to live on the ranch and be available to counsel his employees on any reli- gious problems they might have.
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We want to register our partnership in a different state where centralized management, continuity of life or free transferability of interests are allowed, but operate the business in our home state. This is possible, isn't it?
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We would expect that, all else being equal, investors would pay less for a stock that they view as having become more risky. Assume a stock has just paid a $2.00-per-share dividend. Analysts believe that future dividends will grow at a 14% rate. T..
1. What is Marjorie's allowable deduction for investment interest?
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