During the 2016 holiday season, Bob, a barber, gave business gifts to 34 customers. The values of the gifts, which were not of a promotional nature, were as follows:
10 at $10 each
8 at $25 each
8 at $50 each
8 at $100 each

For 2016, what is the amount of Bob's business gift deduction?

Question

During the 2016 holiday season, Bob, a barber, gave business gifts to 34 customers. The values of the gifts, which were not of a promotional nature, were as follows: ​
10 at $10 each
8 at $25 each
8 at $50 each
8 at $100 each
​
For 2016, what is the amount of Bob's business gift deduction?

Quizplus · Accepted Answer

The IRS allows a deduction of up to $25 per business gift per recipient. Bob gave gifts to 34 customers, but only 8 gifts were at $25 or less. Therefore, the deduction is 8 gifts x $25 = $200. For the remaining gifts, the deduction is capped at $25 per gift, so 26 gifts x $25 = $650. Total deduction is $200 + $650 = $850.

During the 2016 Holiday Season, Bob, a Barber, Gave Business