To promote business activity, the tax rules generally are very liberal in treating business gifts as tax-free income to the recipient.

Question

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While business gifts may be deductible to the giver as a business expense, they are generally not tax-free income to the recipient. There are limits to the amount of deductible business gifts, and certain types of gifts (such as cash or near-cash items) may be subject to special rules or may not be deductible at all.

To Promote Business Activity, the Tax Rules Generally Are Very