Entertainment Mileage

[Snaggletooth]

Taxpayer each year buys football tickets for Univ of Tenn games in Knoxville, TN, and gives them to some of his best customers and painters. He is in upscale painting/print sales for expensive Civil War paintings, $1500 and up. Sometimes taxpayer accompanies the customers, and sometimes he does not.

Spends appx $1200 per year on these tickets. I claim them as a legitimate business expense, but subject to the 50% limitation on entertainment. His volume of business is substantial enough that this is easily within my comfort level.

On two occasions in 2008, in addition to furnishing tickets, taxpayer actually furnished transportation. Round-trip mileage to Knoxville is 640 miles (for two trips).

How much could be deducted for mileage?

a) Full 640 miles at standard rate, because the 50% limitation does not apply to travel or transportation.
b) One-half of the 640 miles at standard rate, since this is really entertainment.
c) Nothing, since mileage is not allowed on entertainment.

My initial feeling is full deduction because if there were an overnight motel, this would not be subject to the 50% limitation.

[ChEAr$]

more info?

Taxpayer each year buys football tickets for Univ of Tenn games in Knoxville, TN, and gives them to some of his best customers and painters. He is in upscale painting/print sales for expensive Civil War paintings, $1500 and up. Sometimes taxpayer accompanies the customers, and sometimes he does not.

Spends appx $1200 per year on these tickets. I claim them as a legitimate business expense, but subject to the 50% limitation on entertainment. His volume of business is substantial enough that this is easily within my comfort level.

On two occasions in 2008, in addition to furnishing tickets, taxpayer actually furnished transportation. Round-trip mileage to Knoxville is 640 miles (for two trips).

How much could be deducted for mileage?

a) Full 640 miles at standard rate, because the 50% limitation does not apply to travel or transportation.
b) One-half of the 640 miles at standard rate, since this is really entertainment.
c) Nothing, since mileage is not allowed on entertainment.

My initial feeling is full deduction because if there were an overnight motel, this would not be subject to the 50% limitation.

First, I have probably seen your client's ads somewhere, although I've never actually ordered anything from him.

You say he "furnished transportation"? What form did that take? did he drive his personal vehicle or provide air tickets or Greyhound tickets?
I am betting he drove and "carried them" with him at the standard rates.
(note; for Yankee readers, "carried" means 'transported'.)

So I will vote for the 50 1/2 cents or 58.. whatever rate in full.

[Gene V]

Not having research this, I would see if he passed the Directly-Related Test or the Associated Test. You can find this in Pub. 463 page 9.

You might consider this as gifts to each client ($25.00 each). Then would not have to deduct
by 50%
IMO.