Q. The limit on seems too low. Can it be avoided by giving a gift to the entire company? D.M., Atlanta
A. Yes. Generally, the IRS limits your deduction for business gifts to a paltry $25 per person. But the $25 limit doesn’t apply to gifts made to a company as a whole without designating specific recipients.
Extra point: If you give tickets to a sporting event or concert and don’t attend, the cost of the tickets may be deducted as either a business gift (subject to the $25 limit) or business entertainment subject to the 50% disallowance rule. However, if you attend and have a business discussion before or after the event, the tickets may only be deducted as entertainment subject to the 50% disallowance rule.
Tip: Frequently, you will come out ahead with an entertainment deduction (as opposed to business gifts to specific recipients), even though you can write off only 50% of entertainment expenses.