Question

In 2019, the CEO of Crimson, Inc., entertains seven clients at a skybox in Memorial Stadium for a single athletic event during the year. Substantive busi-ness discussions occurred at various times during the event. The box costs $2,000 per event and seats 10 people. (The cost of a regular seat at Memorial ranges from $55 to $100.) Refreshments served during the event cost $700. How much of these costs may Crimson deduct?

Answer 1

Answer:

Crimson may not be able to deduct any of the cost incurred. In other words these expenses are inadmissible.

Explanation:

As per scenario given in the above question, Crimson Inc., may not be able to deduct any cost which is incurred related to the entertainment expenses because many changes has been made in the tax cuts and Jobs act,2017. These changes does not allowed deduction of the entertainment and business meals expenses.

In the year 2018, the entertainment expenses could not be deducted according to the tax laws applicable on the companies. Thus, the costs will not be deducted.