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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
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Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Our company sells some medical products to clients and plans

Resolved Question:

Our company sells some medical products to clients and plans to give a free travel package to client if they purchase more than 10,000.00. In this case, how can we dedcut a travel package expense for client in 1120 form? and which item name for this expsne can be used on tax return ? thanks
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

This travel package would be deductible, and you would put it on line 26 "other deductions" and list out the expense on a schedule.

Megan C :

There is no special line on the tax return for this type of expense.

Megan C :

You simply lump it with all the other expenses that don't have special lines on the 1120.

Megan C :

Do you have any further questions?

Megan C :

If no further questions, please rate as "excellent" so that I may receive credit for assisting you today

Customer:

can we name it "travel pakage for clients" on other deductions? woud you give me any name for this? thanks

Customer:

also, is this expense 100% fully deductible? thanks

Megan C :

Yes, you can name it "client travel package" and this can be fully deducted.

Megan C :

It is 100% deductible.

Megan C :

If this is considered a gift, then there is a $25 limit on the deduction.

Megan C :

This is in publication 463....which is accessible HERE

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15587
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

I read pub 463. I am not sure if this is considered a gift or not. We plan to give a free travel package to client if they purchase more than 10,000.00. Travel package cost will be 3,000.00 per client (company). If it is considered a gift, only 25.00 will be deductible? thanks

Expert:  Megan C replied 1 year ago.
Thank you for your follow up. I would probably classify this as a gift, and as such only $25 of the $3,000 would be deductible. It's similar to the gift basket example in the publication, only instead of gift baskets you're giving travel packages.

Please let me know if you need anything additional. If not, please rate my response as "excellent" so that I may receive credit for assisting you today.
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 15587
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 2 other Tax Specialists are ready to help you

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Megan C
Megan C
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Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level