Would all meals and entertainment expense
be reported on Part IV, line 11?
Therefore, items such as federal income taxes, fines, penalties, disallowed interest expense, the disallowed portion of meals and entertainment expense
, and similar items probably do not reduce ACE even though they reduce E&P.
Therefore, items such as federal income taxes, political contributions, penalties, disallowed interest expense, the disallowed portion of meals and entertainment expense
and similar items do not reduce ACE even though these items reduce E&P.
Currently, small businesses can deduct 50 percent of their meals and entertainment expenses
from their federal tax filings.
The procedure also contains substantive updates to the list of "high-cost localities" used in the "high-low" substantiation method and to the deductible percentage of business meals and entertainment expenses
of certain transportation industry employees.
The Tax Court held that, under applicable revenue procedures, the entire per-diem travel allowance paid by a trucking company to its drivers was subject to the 50% deduction limit on meals and entertainment expenses
, because it was computed on the same basis as wages.
This plan would create a tax deduction for spousal and dependent travel, and would boost the tax deduction for business meals and entertainment expenses
to 65 percent for businesses with annual incomes of less than $5 million.
One example is the review of a sample of meals and entertainment expenses
currently subject to a 50-percent limitation.
In "The High Cost of a Free Lunch," (JofA, June00, page 61) the author says IRC section 274(n)(2) provides several exceptions to the 50% limitation on meals and entertainment expenses
all meals and entertainment expenses
subject to the 20% statutory disallowance?
Federal tax planning for meals and entertainment expenses
Some tax practitioners have approached TEI members (who work for GST-registered companies involved 100 percent in a commercial activity and eligible for full ITCs) suggesting that the companies may claim 100 percent ITCs instead of 50 percent ITCs on reimbursement of employee food, beverage, and entertainment expenses (hereinafter referred to as meals and entertainment expenses