| If you give gifts in the course of your
business, you can deduct all or part of the cost, but
you cannot deduct more than $25 for each business gift that you gave away during the tax year.
A gift that is intended for the eventual personal use of a person or class of people
is considered a gift.
Incidental costs, like gift wrapping, packaging, insuring, and mailing, are generally not included in determining the cost of the gift.
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| If a gift item costs less than $4, has your name clearly and permanently imprinted on it, and is one of many identical items that you widely distribute (like pens and cases) - it is not considered a business gift and is not subject to the $25 limit. |
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Signs, display racks, and other promotional materials
are also an exception to the $25 limit.
If you give a gift to a member of a customer's family, the gift is generally considered to be an indirect gift to the customer. This rule does not apply if you have an independent
relationship with that family member.
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| There is an annual gift exclusion which
you can use, but it is beyond the scope of this post. I'm just trying to
cover what is normal in the real estate business.
I hope these tips will help you with knowing what
you can and can't deduct as a gift expense.
To learn more about other expenses
that you can deduct, take a look at
these tips. |
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