Sue is a small business owner who often gives gifts to clients. She gives a $40 gift to her client, Mr. Smith, and his wife. Sue

Question

3 years ago

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Sue is a small business owner who often gives gifts to clients. She gives a $40 gift to her client, Mr. Smith, and his wife. Sue

spent $6 to wrap the gift. She also gave out 400 calendars with her company name on them. Each calendar cost $1. Sue also gave her secretary a $370 watch for his 10 years of service. How much of the above expenses may she deduct? A. $816 B. $446 C. $795 D. $801 E. None of the above

Business

1 answer:

PilotLPTM [1.2K] · Answer 1 · 2022-01-10T10:12:22+03:00

Answer:

D) $801

Explanation:

Businesses can only deduct $25 per gift per client, in this case the client's wife is not an actual client, so Sue can only deduct $25 for the gift plus the wrapping expenses. She can also deduct the $400 spent in the calendars and the $370 watch.

Sue's total deductions = $25 + $6 + $400 + $370 = $801