Question

holly took a prospective client to dinner at a restaurant, and after agreeing to a business deal, they went to the theater. holly paid $290 for the meal andseparately paid $250 for the theater tickets, amounts that were reasonable under the circumstances. what amount of these expenditures can holly deduct as a business expense?

Answer 1

Since the cost of entertainment are not deductible, then, the amount of expenditures that holly can deduct as a business expense will be $145.

Here, since the both are business partner, it is expected that they will both share the expenses therein.

However, the cost of entertainment are not deductible.

 

Holly"s expenses = $290 × 50%

Holly"s expenses = $145.

Therefore, the amount of expenditures that holly can deduct as a business expense will be $145.

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