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Let's say I buy a big Holiday basket for a client's team.

  • Basket cost: $100
  • People on team: 4+

Can I say that the gift is for 4 people instead of 1 client? The write off then is $25x4 rather than $25x1

If no:

What if I hand deliver the gift basket and make an event out of it? Similar to taking them all out for lunch but instead I'm bringing lunch to them?

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  • The tax rule is $25 per recipient person not recipient business, but not sure how to cover a large gift split over multiple people, and it's likely the tax law doesn't specify, making it a friendly gray-area. Meals and entertainment don't have the $25 cap but do have a 50% reduction, so you'd get $50 instead of $100 if you went the meal route.
    – BobbyScon
    Commented Dec 5, 2017 at 18:28
  • My argument is, I can by 4 $25 gifts and bundle them together or 1 $100 gift for 4 people. I suppose I'd have to make sure that each portion is divvied up evenly, or that they know who the gift is to? I'm planning this as though I'm going to get audited even though chances are I won't be (we don't make THAT much money)
    – Jacksonkr
    Commented Dec 6, 2017 at 18:22

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As @BobbyScon said, this is an accounting gray area. Here's my personal experience with similar situations: I've had a few clients get random audited in the past. Unless the auditors are specifically looking for fraud or criminal activity, splitting up a gift into 4 x $25 will ruffle no feathers.

If you really want to play out the scenario, here's how I imagine it would go. You get a gift basket for a client worth ~$100. You file for 4 x $25 gifts. In your accounting notes, you mark: gifts A,B,C for client 1, valued at $24.45. gifts D,E,F for client 2, valued at $23.70. son on and so forth. If you really do get audited, they have to prove that you did it this way with malintent to circumvent gift laws. Unless you completely drop the ball, you'll be fine.

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