Meals In Home

[equinecpa]

A client of mine has a horse training facilities. Fairly often out of town clients will come stay the weekend to ride their horse/receive coaching. My client also provides these clients with meals while they stay with them. Are these meals tax deductible?

How would they substantiate the meal cost? They have grocery receipts but it would be challenging to determine the cost of the actual meals served to their customers since the grocery receipts aren't itemized by meal!

[veritas]

you ask some good questions

I would say the meals are fully deductible. To substantiate I would have the client buy the food separately from the clients food which would not be deductible.

[FEDUKE404]

Deductible - somewhat

In theory, of course the cost of the meals is a business expense. In reality, how DO you figure out the actual cost of any such meals?

Do they just set an extra plate at the family dinner table for the visitor, cook a separate made-to-order meal, order take-out, or what? Any employment costs for person(s) preparing the meals?

One other thing I did not understand is whether this involves overnight stays at the owner's facility, such as in a guest room. That could open an entirely much larger can of worms for the tax return. I assume the business owner is not providing all of these additional "services" for free??

FE

[veritas]

Or you

could give them a feedbag with some oats and a side of salt lick.

[equinecpa]

My clients customers stay overnight -yup you guessed it - in their home! My client originally wanted to claim 1/3 of their home for business use. I vetoed that saying that it didn't meet the exclusive use. I do claim a home office for them.

On the meals -they are served in my clients home. Basically they just cook extra for their guests -no paid labor involved. I think I'll recommend they buy groceries for guest stays separately and that they write on the receipt what it was for. This is not billed to their clients, it's just a benefit they receive for having their horse trained by my client. Now I'm presuming since this is not separately billed it is only 50% deductible like any other meal?

Carolyn

[veritas]

I'm going to say

100% since in reality meals are included in the training cost. The same as a seminar I would think.

[DaveO]

100% since in reality meals are included in the training cost. The same as a seminar I would think.

I would agree and to make it simple figure an average cost per meal prepared maybe $5 unless they are serving steaks or something fancy. Just multiply that by the number of guest meals served.

[FEDUKE404]

Fixed amount may be simpler

I would agree and to make it simple figure an average cost per meal prepared maybe $5 unless they are serving steaks or something fancy. Just multiply that by the number of guest meals served.

I would tend to agree with these costs - think of it as a "boarding house" meal charge.

As long as the dollar amount is reasonable, that should fly. I do think that with the facts stated it would be virtually impossible to come up with an exact cost of the family meals, from which would later be derived the cost of the guest meals.

FE