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Jun. 25, 2008
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Is it Better to Give a Gift or Entertain???
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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.
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Entertainment:
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Gifts:
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Deduct up to 50%
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Deduct up to $25
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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.
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FOR EXAMPLE
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If You Go With Them
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If You DON'T Go With Them
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Treat the cost as an entertainment expense, do not deduct as a gift expense.
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Treat the cost as a gift or entertainment expense, whichever is more advantageous.
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Use the Method that is most Advantageous!!!
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If Raiders Tickets cost $40
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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.
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If Raiders Tickets cost $100
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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.
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To read more tips about Real Estate and Taxes, check out RealTaxTips at TReXGlobal.com.
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