Question

Stork Associates paid $60,000 for a 20-seat skybox at Veterans Stadium for eight professional football games. Regular seats to these games range from $80 to $250 each. At one game, an employee of Stork entertained 18 clients. Stork furnished food and beverages for the event at a cost of $1,300. The game was preceded by a bona fide business discussion, and all expenses are adequately substantiated.a. Stork can deduct $ for this event.b. If there was no bona fide business discussion either preceding or after the event, there is and the deduction would be $.

Answer 1

For Stork Associates, entertainment expenses from a skybox event with clients and a bona fide business discussion are partially deductible, typically 50% of the cost. Without a bona fide business discussion, the event expenses become non-deductible.

Step-by-step explanation:

The deductibility of expenses for a corporate skybox used for business entertainment purposes, such as the situation with Stork Associates, is governed by the tax code. When there is a bona fide business discussion associated with an event, the Internal Revenue Service allows companies to deduct a portion of the expenses incurred. For the specific event in question, where Stork entertained 18 clients and provided food and beverages at a cost of $1,300, the total deductible amount would typically be 50% of the cost directly related to business entertainment, assuming all expenses are substantiated and deemed ordinary and necessary for conducting business.

If no bona fide business discussion took place before or after the event, the associated expenses would generally be non-deductible according to tax laws. Therefore, in such a case, the deduction would be $0. This rule is in place because the IRS requires a direct connection between entertainment expenses and the active conduct of a company's trade or business.

Answer 2

Answer: $1300.00

Explanation: If this is for 2021 & 2022 then the employer can deduct all of the food and beverage -

However, taxpayers still may deduct some or all of the food and beverage expenses associated with operating their trade or business (e.g., a business meal with a current or potential client, or meals consumed by employees on work travel). In general, only 50 percent of food and beverage expenses can be deducted.

However, given the impact of the COVID-19 pandemic on restaurants, Congress provided a temporary 100 percent deduction for meals and beverages provided by a restaurant in 2021 and 2022.