section 162(a) of the internal revenue code is the deduction provision for business or trade expenses. in order to be a trade or business expense and qualify for a deduction, it must satisfy 5 elements in addition to qualifying as an expense. it must be (1) ordinary and (2) necessary ("welch v. helvering" defines this as necessary for the development of the business at least in that they were appropriate and helpful). expenses paid to preserve one’s reputation do not appear to qualify). in addition, it must be (3) paid or incurred during the taxable year. it must be paid (4) in carrying on (meaning not prior to the start of a business or in creating it) (5) a trade or business activity. to qualify as a trade or business activity, it must be continuous and regular, and profit must be the primary motive. an expense can be a loss or profit. but loss or profit need not really be an expense.