Nancy owns a small dress store.During the year, Nancy gives business gifts having the indicated cost to the following individuals: $\begin{array}{llcc}
\text { Mrs. Johns (a customer)} & \text { \$ 37plus \$ 3 shipping} \
\text { Mr. Johns (nonclient husband of Mrs. Johns) } &\$10\
\text {Ms. B rown (a customer) } &\$22\
\text { } &\
\text { } &\
\text { } &\
\end{array}$
What is the amount of Nancy's deduction for business gifts?

Question

Nancy owns a small dress store.During the year, Nancy gives business gifts having the indicated cost to the following individuals: $\begin{array}{llcc}
  \text {  Mrs. Johns (a customer)} & \text { \$ 37plus \$ 3 shipping} \
 \text { Mr. Johns (nonclient husband of Mrs. Johns) } &\$10\
 \text {Ms. B rown (a customer)  } &\$22\
 \text {  } &\
 \text {  } &\
 \text {  } &\
\end{array}$
 What is the amount of Nancy's deduction for business gifts?

Quizplus · Accepted Answer

The IRS allows a deduction of up to $25 per recipient for business gifts. Therefore, Nancy can deduct $25 for Mrs. Johns and $22 for Ms. Brown, totaling $47. The $10 gift to Mr. Johns is not deductible as he is not a client. The shipping cost is included in the gift cost for Mrs. Johns, so the total deduction is $25 (Mrs. Johns) + $22 (Ms. Brown) = $47. However, since the options provided do not match this calculation, the closest option is $50, which might be a rounding or option error.

Nancy Owns a Small Dress Store What Is the Amount of Nancy's Deduction for Business Gifts