Business gifts?

Discussion in 'Tax' started by Nan Eklund, Dec 4, 2003.

  1. Nan Eklund

    Nan Eklund Guest

    We just sent flowers for the funeral of a long time client.
    For some reason it started me wondering how to classify the
    expense (about $50). Not exactly a gift but what? Could
    just ignore it but it's an off day.

    Nan, EA in LA

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    Nan Eklund, Dec 4, 2003
    #1
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  2. > We just sent flowers for the funeral of a long time client.
    > For some reason it started me wondering how to classify the
    > expense (about $50). Not exactly a gift but what? Could
    > just ignore it but it's an off day.


    In our books, we call it the sunshine fund and on our
    return, it is client relations or misc.

    Helen, EA in PA
    Member of The Tax Gang
    President, PA Society of Enrolled Agents
    Campaigning for NAEA Board of Directors - Looking for YOUR vote

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    Helen P. OPlanick EA, Dec 7, 2003
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  3. Nan Eklund wrote:

    > We just sent flowers for the funeral of a long time client.
    > For some reason it started me wondering how to classify the
    > expense (about $50). Not exactly a gift but what? Could
    > just ignore it but it's an off day.


    A tax deduction is never ignored! lol
    In my chart of accounts I use "gifts". That's better than
    "miscellenous", or even "supplies'. Besides, at year's end
    you are alerted to the category and go back and count the
    number of gifts and multiply by 25$ each for the tax
    deduction.

    Cheer$,
    Harlan

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    Harlan Lunsford, Dec 7, 2003
    #3
  4. Nan Eklund <> wrote:

    > We just sent flowers for the funeral of a long time client.
    > For some reason it started me wondering how to classify the
    > expense (about $50). Not exactly a gift but what? Could
    > just ignore it but it's an off day.


    Advertising? You are keeping your company name in view for
    hoped-for continuation of your business.

    __
    Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

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    Arthur Kamlet, Dec 7, 2003
    #4
  5. "Nan Eklund" <> wrote:

    > We just sent flowers for the funeral of a long time client.
    > For some reason it started me wondering how to classify the
    > expense (about $50). Not exactly a gift but what? Could
    > just ignore it but it's an off day.


    A couple of quick suggestions

    public relations
    marketing expense to get the estate as a client

    --
    <<< Benjamin Yazersky CPA [NJ & NY] >>>

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    Benjamin Yazersky CPA, Dec 7, 2003
    #5
  6. "Nan Eklund" <> wrote:

    > We just sent flowers for the funeral of a long time client.
    > For some reason it started me wondering how to classify the
    > expense (about $50). Not exactly a gift but what? Could
    > just ignore it but it's an off day.


    I always categorize something like that as advertising or
    business promotion. I do it for both clients and myself.

    Joel Berry, CPA
    Sugar Land, Texas

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    Joel Berry, CPA, Dec 7, 2003
    #6
  7. Nan Eklund

    Mike Lewis Guest

    "Nan Eklund" <> wrote:

    > We just sent flowers for the funeral of a long time client.
    > For some reason it started me wondering how to classify the
    > expense (about $50). Not exactly a gift but what? Could
    > just ignore it but it's an off day.


    Gifts of this type are limited to $25 to one recipient each
    year and the balance is non deductible.

    Mike Lewis, CPA

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    Mike Lewis, Dec 8, 2003
    #7
  8. Mike Lewis wrote:
    > "Nan Eklund" <> wrote:


    >> We just sent flowers for the funeral of a long time client.
    >> For some reason it started me wondering how to classify the
    >> expense (about $50). Not exactly a gift but what? Could
    >> just ignore it but it's an off day.


    > Gifts of this type are limited to $25 to one recipient each
    > year and the balance is non deductible.


    finally someone agrees with me about it being a gift.
    Ordinary and necessary it may be , but adverising?
    promotional? Do you think a funeral is a proper place for
    such?

    Maybe, but I don't.

    25$ Cheers,
    Harlan Lunsford, EA n LA

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    Harlan Lunsford, Dec 9, 2003
    #8
  9. Nan Eklund

    D. Stussy Guest

    Harlan Lunsford wrote:
    > Nan Eklund wrote:


    >> We just sent flowers for the funeral of a long time client.
    >> For some reason it started me wondering how to classify the
    >> expense (about $50). Not exactly a gift but what? Could
    >> just ignore it but it's an off day.


    > A tax deduction is never ignored! lol
    > In my chart of accounts I use "gifts". That's better than
    > "miscellenous", or even "supplies'. Besides, at year's end
    > you are alerted to the category and go back and count the
    > number of gifts and multiply by 25$ each for the tax
    > deduction.


    Multiply the number of gifts, not RECIPIENTS, by $25
    (assuming $25 or more were spent at each transaction)?
    Hmmmm.

    Are we oversimplfying here, or trying to see what we can get
    away with? ;-)

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    D. Stussy, Dec 9, 2003
    #9
  10. Harlan Lunsford <> wrote:

    > finally someone agrees with me about it being a gift.


    To whom? The dead person?

    > Ordinary and necessary it may be , but adverising?
    > promotional? Do you think a funeral is a proper place for
    > such?


    I'm not aware of any law or regulation specifying that good
    taste is required in advertising or other business
    promotion.

    Seth

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    Seth Breidbart, Dec 12, 2003
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  11. Nan Eklund

    Dick Adams Guest

    If a consultant distributes bottles of liquor to clients
    and their secretaries at Christmas time, are those bottles
    considered gifts subject to the $25 rule or are they a
    marketing expense?

    How is this distribution different than inviting them to a
    client appreciation party?

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    Dick Adams, Dec 12, 2003
    #11
  12. Nan Eklund

    Nan Eklund Guest

    > marketing expense to get the estate as a client

    I LIKE that one. In fact, we'll be doing her final return.
    I doubt there will have to be an estate return, but some
    members of the family may show up.

    Nan, EA in LA

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    Nan Eklund, Dec 12, 2003
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  13. Nan Eklund

    Nan Eklund Guest

    The $25 limit is what started my thinking about this. You
    can NOT get a decent floral arrangement for a funeral (which
    includes a delivery expense to the church) for $25. And if
    you did, what you'd get would almost be an insult. I can
    understand IRS trying to limit real gifts, but this is more
    of a tribute to a long time client - which he is no longer
    able to appreciate.

    Not exactly a big deal (only two this year for funerals and
    one to a hospital) so we can swallow anything over
    $25.......but this is an area in which I think they should
    show some elasticity.

    Nan, EA in LA

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    Nan Eklund, Dec 12, 2003
    #13
  14. > If a consultant distributes bottles of liquor to clients
    > and their secretaries at Christmas time, are those bottles
    > considered gifts subject to the $25 rule or are they a
    > marketing expense?
    >
    > How is this distribution different than inviting them to a
    > client appreciation party?


    Tell you what, Dick, you bring me the bottles and also
    invite me to the Xmas party and I'll work out the difference
    for you!

    Helen, EA in PA
    Member of The Tax Gang
    President, PA Society of Enrolled Agents
    Campaigning for NAEA Board of Directors - Looking for YOUR vote

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    Helen P. OPlanick EA, Dec 14, 2003
    #14
  15. (Nan Eklund) wrote:

    > The $25 limit is what started my thinking about this. You
    > can NOT get a decent floral arrangement for a funeral (which
    > includes a delivery expense to the church) for $25. And if
    > you did, what you'd get would almost be an insult. I can
    > understand IRS trying to limit real gifts, but this is more
    > of a tribute to a long time client - which he is no longer
    > able to appreciate.


    Include some small print that says, "brought to you by Smith
    & Church, CPA's" and take it as an advertising expense.

    Stu

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    Stuart O. Bronstein, Dec 14, 2003
    #15
  16. Nan Eklund wrote:

    > The $25 limit is what started my thinking about this. You
    > can NOT get a decent floral arrangement for a funeral (which
    > includes a delivery expense to the church) for $25. And if
    > you did, what you'd get would almost be an insult. I can
    > understand IRS trying to limit real gifts, but this is more
    > of a tribute to a long time client - which he is no longer
    > able to appreciate.
    >
    > Not exactly a big deal (only two this year for funerals and
    > one to a hospital) so we can swallow anything over
    > $25.......but this is an area in which I think they should
    > show some elasticity.


    It's been 25$ for as long as I can remember, iow all the
    time I've been in practice. So surely inflation should be
    used to adjust that figure up to about..... 65$. WRite your
    congressman now.

    I called a floral client to send maybe a 35-40$ arrangement
    to a funeral couple of months ago and unless she finally
    remembers to send me the bill, I won't even have that 25$
    to deduct this year. And yes, you can get some decent for
    that amount in this LA.

    Holiday Cheer$,
    Harlan Lunsford, EA n LA

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    Harlan Lunsford, Dec 14, 2003
    #16
  17. Seth Breidbart wrote:
    > Harlan Lunsford <> wrote:


    >> finally someone agrees with me about it being a gift.


    > To whom? The dead person?


    No. To the people who attend the funeral, viz the survivors.

    >> Ordinary and necessary it may be , but adverising?
    >> promotional? Do you think a funeral is a proper place for
    >> such?


    > I'm not aware of any law or regulation specifying that good
    > taste is required in advertising or other business
    > promotion.


    Has nothing to do with law or regulations; it's just good
    sense. Seems I remember a movie once showing the used car
    salesman at a funeral handing out his business cards. Movie
    was set either in California or New Jersey.

    Holiday Cheer$,
    Harlan Lunsford, EA n LA

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    Harlan Lunsford, Dec 14, 2003
    #17
  18. Dick Adams wrote:

    > If a consultant distributes bottles of liquor to clients
    > and their secretaries at Christmas time, are those bottles
    > considered gifts subject to the $25 rule or are they a
    > marketing expense?
    >
    > How is this distribution different than inviting them to a
    > client appreciation party?


    Ah yes. there'sa special dispensation for bottles of
    Usqe-beatha at Christmas time. I would of course use the
    miniatures in order to provide a variety of single malts for
    tasting purposes and building appreciation of Scottish
    culture. Well under the 25$ rule there and if you tell the
    client it's a really great and classic single malt, you can
    get a lot of mileage out of it. And save money too, like
    any good Scotsman.

    Now I'd draw the line at distributing secretaries at
    Christmas time. oh. nevermind.

    Holiday Cheer$,
    Harlan Lunsford

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    Harlan Lunsford, Dec 14, 2003
    #18
  19. Nan Eklund

    Nan Eklund Guest

    > o send maybe a 35-40$ arrangement

    That's about where I started (and also to a florist client)
    but they add the delivery and you wind up with $50 or so.
    How come they can up medical and moving mileage costs
    regularly but not the cost of gifts? IF they ARE gifts.

    Nan, EA in LA

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    Nan Eklund, Dec 15, 2003
    #19
  20. Nan Eklund

    D. Stussy Guest

    Dick Adams wrote:

    > If a consultant distributes bottles of liquor to clients
    > and their secretaries at Christmas time, are those bottles
    > considered gifts subject to the $25 rule or are they a
    > marketing expense?


    Business gift.

    > How is this distribution different than inviting them to a
    > client appreciation party?


    Because they don't take anything home.

    ============================================================
    Moderator: Thank you for a cogent distinction.
    ============================================================

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    D. Stussy, Dec 15, 2003
    #20
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