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Fremont, California

T-ReX Property Management Software for real estate investors to save them TIME and MONEY

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To Gift, or Not to Gift... That is the Question....

Posted at Property Management Software by Niman Singh

Jun. 25, 2008

Categorized in: Property Management Software

Tagged with: entertainment, real estate professionals, taxtips

Starred by: 2 Members

Is it Better to Give a Gift or Entertain???

Most expenses are deductible as long as they are ordinary and necessary for your business. You can deduct up to 50% of entertainment costs, or gift costs up to $25 each.

Entertainment:	Gifts:
Deduct up to 50%	Deduct up to $25

Generally, an item that is considered a gift is also considered to be an entertainment expense.

If you give an item that is intended to be used at a later date (like tickets to a performance or event), it is usually considered a gift.

Sometimes you will have the option of deducting those costs as a gift or entertainment expense, depending on the circumstances.

FOR EXAMPLE
If You Go With Them	If You DON'T Go With Them
Treat the cost as an entertainment expense, do not deduct as a gift expense.	Treat the cost as a gift or entertainment expense, whichever is more advantageous.

Use the Method that is most Advantageous!!!

If Raiders Tickets cost $40

If the tickets cost $40, you'd rather treat it as a gift cost so you could deduct $25. If you deducted it as an entertainment expense, you could only deduct $20.

If Raiders Tickets cost $100

If the tickets cost $100, you'd rather treat it as an entertainment expense so you can deduct $50. If you deducted it as a gift cost, you could only deduct $25.