Holly took a prospective client to dinner, and after agreeing to a business deal, they went to the theater. Holly paid $360 for the meal and separately paid $222 for the theater tickets, amounts that were reasonable under the circumstances. What amount of these expenditures can Holly deduct as a business expense?

Question

Quizplus · Accepted Answer

Under the tax law, 50% of meal expenses related to business can be deducted. Therefore, Holly can deduct 50% of $360, which is $180. Entertainment expenses are generally not deductible.

Holly Took a Prospective Client to Dinner, and After Agreeing