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Lev
Lev, Tax Advisor
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Ralph made the following business gifts during the year. To

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Ralph made the following business gifts during the year.


To Robert (a key client) at Christmas $50
To Angel (Robert’s 8-year old daughter) on her birthday 20
To Art (Ralph’s secretary) on his birthday ($3 was for gift wrapping) 30
To Paige (Ralph’s boss) at Christmas 40


Presuming proper substantiation, Ralph’s deduction is:



1. $98.

2. None of the above.

3. $78.

4. $53.

5. $73.

To Robert (a key client) at Christmas $50 - $25 deductible

To Angel (Robert's 8-year old daughter) on her birthday 20 - not deductible personal gift.

To Art (Ralph's secretary) on his birthday ($3 was for gift wrapping) 30 - $28 deductible ($25 limit per person plus Incidental costs(packaging) are generally not included in determining the cost of a gift for purposes of the $25 limit.

To Paige (Ralph's boss) at Christmas 40 - $25 deductible

 

Presuming proper substantiation, Ralph's deduction is:

1. $98.

2. None of the above.

3. $78.

4. $53.

5. $73.

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