A taxpayer takes six clients to an NBA playoff game.If all of the tickets (list price of $120 each) are purchased on the Internet for $1,800 ($300 each), only $150 ($300 ´ 50% cutback adjustment) per ticket is deductible.

Question

Quizplus · Accepted Answer

The deductible amount for entertainment expenses, such as tickets to an NBA playoff game, is subject to a 50% cutback adjustment, but the deduction is based on the face value of the ticket, not the inflated price paid. Therefore, only $60 per ticket (50% of $120) is deductible, not $150.

A Taxpayer Takes Six Clients to an NBA Playoff Game