An S-Corporation sponsors a local Little League team. Buys shirts, some supplies, has a pizza party at end of season, that kind of expenses. Does the S deduct those expenses on its 1120-S? Promotion or networking or entertainment or...? Or, Charity and passed through on K-1 to shareholders?
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Facts and Circumstances Anyone?
The team is named for the business, right? So the big question is whether the S Corp offers a product or service that is commonly used by people who attend little league games which I would presume to be mostly young ballplayers and their families. In other words if the S Corp does business or wants to do business with lots of middle class kids and or adults then you can justify advertising / promotion. If the S corp is a law firm that only represents large businesses or only very wealthy people or is a wholesaler of almost anything then no there are not that many potential customers or clients in the stands and the advertising / promotion value would seem to me to be more debatable thus leaving me leaning more toward charity.
I think I would ask my client what percentage of the families at ball games buy from or hire people offering his product or service. -
Name Value
The Corporate name is being displayed to the public. I would consider this advertising also.Comment
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Thanks, everyone
I'm leaning toward advertising, too. It's a bit gray, but it is definitely one of his main ways (that and Chamber of Commerce) for local networking. Here in pricey Fairfield County, CT, he needs to keep networking with potential sponsors and talent and people who know people for his radio syndication business. He has gotten all of those through his two local volunteer positions, as well as a supply of summer interns and a technical producer for his NY and CT production work.Comment
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