Wall Street Journal BLASTS McCain

[Aiemond]

Well, the other 20% would be considered profit. It may push him over, but even so, thats money he can pocket or reinvest (if reinvested in business operations he can then deduct next year). Thats just like making say, 200k from a job.
This is what can be deducted:

"Internal Revenue Code § 162. 'Trade or business expenses.'

"(a) In general. There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including

"(1) a reasonable allowance for salaries or other compensation for personal services actually rendered;

"(2) traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business; and

"(3) rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity."

"
this from the tax code. This basically covers the whole cost of business.