What Entertainment Expenses Are Deductible?

09 Jun What Entertainment Expenses Are Deductible?

If you are questioning what entertainment expenses are deductible, or worse yet if you aren’t here are some basic guidelines you can use to decide.

• The taxpayer must have had more than a general expectation of deriving some income or other business benefit at an indefinite future time;
• During the entertainment period, the taxpayer must have engaged in a bona fide business transaction other than entertainment for the purpose of obtaining such business benefit; 
• The principal character of the combined business and entertainment was the active conduct of the taxpayer’s trade or business; and
• The expenditure was allocable to the taxpayer and a person or persons with whom the taxpayer engaged in the active conduct of trade or business during the entertainment.