Question

Sue is a small business owner who often gives gifts to clients. She gives a $40 gift to her client, Mr. Smith, and his wife. Sue spent $6 to wrap the gift. She also gave out 400 calendars with her company name on them. Each calendar cost $1. Sue also gave her secretary a $370 watch for his 10 years of service. How much of the above expenses may she deduct?

Answer 1

Answer:

The correct answer to the following question is $801.

Explanation:

Given information -

Sue gave gift to Mr and Mrs Smith of - $40

Note* - The deduction limit for a gift given to another person is $25

Expense spent on wrap - $6

Calendar cost - 400 x 1 = $400

Amount given to secretary for service of 10 years - $370

Therefore the total amount of expenses that maybe deducted =

$25 + $6 + $370 + $400

= $801