Question

In 2018, the CEO of Crimson, Inc., entertains 7 clients at a skybox in Memorial Stadium for a single athletic event during the year. Substantive business discussions occurred at various times during the event. The box cost $2,000 per event and seats 10 people. (The cost of a regular, nonluxury box seat at Memorial ranges from $55 to $100.) Refreshments served during the event cost $700.

How much of these costs may Crimson deduct as an entertainment expense?

Answer 1

Ans: Entertainment expenmses whiich are directly associated with the business like the expenses incured on business metting or discussions or to obtain a new business are allowed as a deduction under IRS.

So allowable deduction is =$ 100*1.5+ $ 700 = $ 850