On their birthdays, Lily sends gift certificates (each valued at $25) to Caden (a key client) and to each of Caden's two minor children. Lily can deduct only $25 as to these gifts.

Question

Quizplus · Accepted Answer

According to IRS rules, gift certificates or any gift given to an individual or their dependents cannot be deducted as a business expense beyond $25 per individual per year. Therefore, Lily can only deduct $25 for each gift certificate she gives to Caden and his two children, totaling a deduction of $75.

On Their Birthdays, Lily Sends Gift Certificates (Each Valued at $25)