@AquaJen
irs pub 463
Gifts
If you give gifts in the course of your trade or business,
you may be able to deduct all or part of the cost. This
chapter explains the limits and rules for deducting the
costs of gifts.
Chapter 3 Gifts
17
$25 limit. You can deduct no more than $25 for business
gifts you give directly or indirectly to each person during
your tax year. A gift to a company that is intended for the
eventual personal use or benefit of a particular person or a
limited class of people will be considered an indirect gift to
that particular person or to the individuals within that class
of people who receive the gift.
If you give a gift to a member of a customer’s family, the
gift is generally considered to be an indirect gift to the cus
tomer. This rule doesn’t apply if you have a bona fide, in
dependent business connection with that family member
and the gift isn’t intended for the customer’s eventual use.
If you and your spouse both give gifts, both of you are
treated as one taxpayer. It doesn’t matter whether you
have separate businesses, are separately employed, or
whether each of you has an independent connection with
the recipient. If a partnership gives gifts, the partnership
and the partners are treated as one taxpayer.
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Exceptions. The following items aren’t considered gifts
for purposes of the $25 limit.
1. An item that costs $4 or less and:
a. Has your name clearly and permanently imprinted
on the gift, and
b. Is one of a number of identical items you widely
distribute. Examples include pens, desk sets, and
plastic bags and cases.
2. Signs, display racks, or other promotional material to
be used on the business premises of the recipient
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you are probably thinking about the rules for gifts between individuals
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the business gift rule limit hasn't changed for decades
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