Jack is a lawyer who is a member at Ocean Spray Country Club where he spends $7,200 in dues, $4,000 in business meals, and $2,000 in green fees to entertain clients.He has separate invoices for the meals.He is also a member of the local Rotary club where he meets potential clients.The dues for the Rotary club are $1,200 a year.How much of the above expenses can Jack deduct as business expenses?

Question

Quizplus · Accepted Answer

Jack can only deduct the expenses directly related to entertaining clients. This includes the $2,000 in green fees and $4,000 in business meals. However, he cannot deduct the $7,200 in Ocean Spray Country Club dues or $1,200 in Rotary club dues, as membership dues are generally not considered a deductible expense. Thus, the total amount Jack can deduct is $6,000 (2,000 + 4,000). Option B is the closest to this amount.

Jack Is a Lawyer Who Is a Member at Ocean