Gifts Vs. Entertainment Expenses

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Deduct up to 50% of entertainment costs, or gift costs up to $25 each, as long as they are ordinary and necessary for your rental investment. Any item that might be considered either a gift or entertainment generally will be considered entertainment. However, if you give an item that is intended to be used at a later date, treat it as a gift.

If you give someone tickets to a theater performance or sporting event and you do not go, you have a choice of treating the cost as either a gift expense or an entertainment expense, whichever is to your advantage. For example, if the tickets cost $20 you would treat it as a gift so you could deduct the whole amount, but if the tickets were $100 dollars then you would want to treat it as an entertainment expense so you can write-off $50 instead of $25.

If you go with the person to the event, you must treat the cost of the tickets as an entertainment expense and cannot treat it as a gift expense.

This is a blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies. Gifts Vs. Entertainment Expenses is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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