How much can the taxpayer deduct for business gifts?

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During the holiday season, a taxpayer gives business gifts to 25customers. The gifts have the following fair market values:7 gifts of property valued at $10 each5 gifts of property valued at $20 each13 gifts of property valued at $50 each

How much can the taxpayer deduct for business gifts?

a. $312.50*b. $495.00c. $625.00d. $247.00

1 Answer

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Darshita6.14K 0 Comments

Answer: $ 495

Working notes for the above answer is as under

7 10 70
5 20 100
13 50 650
    820
  Less:  
  13*25 -325
  Net 495

 

Note :

You can deduct no more than $25 for business gifts you give directly or indirectly to each person during your tax year

 

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