Q. Our company intends to provide gift baskets to valued customers during the holidays. Are they deductible and tax-free? M.L.B., Sheboygan, Wis.
A. Yes, within limits. You can deduct up to $25 forgiven directly or indirectly to each person during the year. A gift to a company intended for the eventual personal use or benefit of a particular person or a limited class of people is treated as an indirect gift to that particular person or individuals within the class of people who received the gift.
Tip: Regardless of the amount, business gifts aren’t taxable to the recipients.