Deduct dues to engineering committee at a club?

USA Discussion in 'Businesses / Corporations' started by Geoffre14, Sep 12, 2017.

  1. Geoffre14

    Geoffre14

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    I am the principal of a small engineering consultant business. I joined a club to be on board their engineering committee and network with the other engineers on the committee--one of whom in particular, who could be a huge client for us.

    The club also happens to provide non-professional / social / athletic facilities (although I never use them).

    Can we deduct dues to the club?
     
    Geoffre14, Sep 12, 2017
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  2. Geoffre14

    kirby VIP Member

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    For a business owner, dues to a professional or business organization are deductible UNLESS the organization's main purpose is to provide you with entertainment facilities. In your case you seem to have both going on. Doesn't matter if you don't use the non-business facilities. So, key here is what is the organization's MAIN purpose, which -clearly- I can't tell from here. Your tax preparer has to figure this out.
     
    kirby, Sep 15, 2017
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  3. Geoffre14

    Drmdcpa VIP Member

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    That is a safe answer but not completely correct. It is not so much the actions of the organization, rather the intent and actions of the business owner.

    If the intent is to use the place for marketing purposes and it is actually used for that, then the fees are deductible. They may be limited to the 50% deductible for meals and entertainment or the business owner may choose to prorate them based on usage of the facilities. It helps to support deducting them as marketing expense if they are an effective marketing tool.

    Golfing fees are deductible to someone that gets new business and entertains clients in that manner. Again there may be some limitation for the meals and entertainment 50%.

    Season tickets are deductible if distributed to clients or otherwise used for marketing. Any used by the business owner would not be unless a client used the same; again the meals and entertainment limit may apply.

    A boat can be a business deduction if it is used to entertain clients and market to prospective clients. Again it helps to substantiate the expense if it actually works at getting new clients.

    Pointing out such expenses to your CPA is wise.

    Also always remember hogs get fed, pigs get slaughtered.
     
    Drmdcpa, Sep 15, 2017
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