Shane, an employee, makes the following gifts, none of which are reimbursed: $$\begin{array} { | l | r | }
\hline \text { Shane's manager } & \$ 30 \
\hline \text { Shane's personal assistant } & 40 \
\hline 4 \text { customers } ( \$ 27 \text { each } ) & 108 \
\hline
\end{array}$$ What amount of the gifts is deductible before application of the 2% of AGI floor for miscellaneous itemized deductions?
A) $125
B) $150
C) $75
D) $178

Question

Shane, an employee, makes the following gifts, none of which are reimbursed: $$\begin{array} { | l | r | } 
\hline \text { Shane's manager } & \$ 30 \
\hline \text { Shane's personal assistant } & 40 \
\hline 4 \text { customers } ( \$ 27 \text { each } ) & 108 \
\hline
\end{array}$$ What amount of the gifts is deductible before application of the 2% of AGI floor for miscellaneous itemized deductions?
A) $125
B) $150
C) $75
D) $178

Quizplus · Accepted Answer

The gifts to Shane's manager and personal assistant are not deductible because they are not business-related. The gifts to the customers are deductible because they are business-related and do not exceed $25 per person. Therefore, the total amount of deductible gifts is $30 + $40 + $108 = $178.

Shane, an Employee, Makes the Following Gifts, None of Which