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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16559
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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We plan to send a wine ($400.00 value) to our parent companys

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We plan to send a wine ($400.00 value) to our parent company's CEO as birthday gift. Is there any way we can fully deduct instead of 25 dollar limit rule? Another question, can we fully deduct this gift (400.00 values) in the income statement based on GAAP regardless of tax deduction? Thanks

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

According to publication 463, there's a $25 limit on direct and indirect gifts given to any one person during the tax year

MyVirtualCPA :

So, even though you are giving $400 you can only deduct $25

MyVirtualCPA :

http://www.irs.gov/publications/p463/ch03.html

MyVirtualCPA :

Also, you can deduct this under GAAP, but there will be a permanent difference in your book/tax difference as you will be unable to deduct $375

MyVirtualCPA :

Is there anything else that I can assist you with? If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Megan C and 2 other Tax Specialists are ready to help you
Thank you for your question, Sunny. I see you were unable to join our chat. Please take a moment to look over the response, then rate as 'excellent' so that I may receive credit for assisting you today. Thanks again.
Customer: replied 3 years ago.

thank you!

You're welcome. Please remember to come back and see me next time you need to ask a question. Thanks