Ralph made the following business gifts during the year. $\begin{array} { l }
\text { To Robert (a key client) at Christmas} &\$50\
\text {To Angel (Robert's 8-year old daughter) on her birthday } &20\
\text {To Ast (Ralph's secretary) on his birthday ( $ \$ 3 $ was for gift wrapping) } &30\
\text {To Paige (Ralph's boss) at Christmas } &40\
\end{array}$
Presuming proper substantiation, Ralph's deduction is:

Question

Ralph made the following business gifts during the year. $\begin{array} { l  }
 \text { To Robert (a key client) at Christmas} &\$50\
 \text {To Angel (Robert's 8-year old daughter) on her birthday } &20\
 \text {To Ast (Ralph's secretary) on his birthday ( $ \$ 3 $ was for gift wrapping) } &30\
 \text {To Paige (Ralph's boss) at Christmas } &40\
\end{array}$
 Presuming proper substantiation, Ralph's deduction is:

Quizplus · Accepted Answer

Gifts to clients and their family members are generally considered business gifts, but there is a $25 limit per person per year that is deductible. The gift to Ast (Ralph's secretary) is fully deductible as it is considered a business expense rather than a gift. The gift wrapping cost is also deductible. Therefore, Ralph can deduct $25 for Robert, $20 for Angel (since it's under the $25 limit), and $30 for Ast, totaling $75. However, gifts to one's boss are not deductible, so Paige's gift is not included. The correct total deductible amount is $75, not $53 as initially indicated. This was an error in calculation. The correct choice should reflect the sum of deductible amounts based on the IRS rules for business gifts and expenses.

Ralph Made the Following Business Gifts During the Year Presuming Proper Substantiation, Ralph's Deduction Is: A) $0

Ralph Made the Following Business Gifts During the Year Presuming Proper Substantiation, Ralph's Deduction Is:
A) $0