Business Meals

[Mike Mac]

I'll open myself up for some pot-shots for the dumb question of the day (month) (year) but
I just got into a discussion about a basic tax write-off that I should know the answer for
but am suddenly ignorant of. I checked both of the reference books and IRS pubs but
can not see a clear answer:

When a sole proprietor takes out a client for a business related meal, is the entire cost of both meals subject to the 50% rule or just the cost of the client's meal (figuring the tax payer has to eat either way)???

[GIMoe]

Meals and Entertainment

When a sole proprietor takes out a client for a business related meal, is the entire cost of both meals subject to the 50% rule or just the cost of the client's meal (figuring the tax payer has to eat either way)???

Yes, the entire cost of both meals, to include tax and tips, -subject to the 50% rule- are deductible to the taxpayer that paid the expense. See example in TTB page 8-9

[Mike Mac]

Looked but................

Thanks for the prompt response BUT...Maybe I've put too many hours in today. I looked at that section of the book and I do not see the example on page 8-9 that specifically states that shows where you are allowed to take 50% of both meals. Can you help a
tired (and evidently blind man) out and tell me exactly where it says that. I feel a bit sheepish because I can't find it in the IRS pubs, TTB, or Quickfinder.

[S T]

Can't give the cite

But I believe that it is under meals and entertainment section. So if the business owner is meeting with a client or potential client, the entire amount + tips is deductible and subject to 50%. As long as it is documented and an legitimate business expense.

I am like you, think I know then read the rules and then question what I think I already knew and then multitude of questions come in and end up overthinking the problem.

Sandy

[Mike Mac]

Pub 463

Thanks again for the replies.

I glanced through Publication 463 this morning. It didn't come all out and say it but it did give an example that put my mind back to rest again. The example stated that if the taxpayer went out with a group of folks, three that were clients and seven were social
guests, that the taxpayer could use 4/11th of the total bill as a business expense (subj to the 50% limitation and all regular rules).