Nancy owns a small dress store.During 2013,Nancy gives business gifts having the indicated cost to the following individuals: $\begin{array}{ll}
\text { Mrs. Johns (a customer) } & \$ 37 \
\text { plus } \$ 3 \text { shipping } & \
\text { Mr. Johns (nonclient husband of Mrs. Johns) } & \$ 10 \
\text { Ms. Brown (a customer) } & \$ 22
\end{array}$ What is the amount of Nancy's deduction for business gifts?

Question

Quizplus · Accepted Answer

The IRS allows a deduction of up to $25 per recipient for business gifts. Nancy can deduct $25 for Mrs. Johns and $22 for Ms. Brown, totaling $47. The $3 shipping cost for Mrs. Johns' gift is also deductible, bringing the total to $50. Gifts to Mr. Johns are not deductible as he is not a client.

Nancy Owns a Small Dress Store What Is the Amount of Nancy's Deduction for Business Gifts