Masonry Magazine December 1963 Page. 19
estions & Answers
(Continued from page 15).
Answer: Any item which might be considered entertainment or a gift generally will be considered to be entertainment and not a gift. However, special rules describe certain items as gifts. For example, packaged food or beverages, furnished to a business customer for consumption at a later date, are considered as gifts.
Question: If I provide tickets to a theater performance or to a sporting event to a business customer, is the cost of the tickets considered an expense for entertainment or a gift?
Answer: If you do not accompany your customer to the event, you may treat the cost of the tickets either as a gift or as entertainment, whichever is most advantageous to you. In such a case you may change your treatment of the expense as either a gift or entertainment during the time prescribed for assessment of tax as provided in section 6501 of the Code. In most instances this would be the three-year period following the due date of your income tax return. However, if you do accompany the customer to the entertainment event, the cost of the tickets must be treated as an entertainment expense.
irect Gifts
Question: Is a gift to the wife of a business customer treated separately from a gift to the customer himself?
Answer: The $25 limitation applies to gifts made "directly or indirectly" to an individual. A gift to the wife of a business customer of the taxpayer is generally considered as made indirectly to the customer. However, if the customer's wife has an independent business connection with the taxpayer, a gift to her would not be regarded as an indirect gift to her husband unless it was intended for his evenual use or benefit.
Question: If Corporation X gives to Corporation Y a large number of inexpensive gifts, such as tickets to local baseball games, are they subject to the $25 limitation?
Answer: Not necessarily. The limitation applies only to gifts made directly or indirectly to an individual. If the gift is not intended for the eventual personal use or benefit of a particular individual or a limited class of individuals, the gift will not be considered to be made to an individual.
Question: If I provide a gift to a business associate which costs $25, and my wife gives him a gift costing $25 during the same year, may we deduct both gifts?
Answer: No. A husband and wife who make gifts are considered one taxpayer for purposes of computing the $25 limitation. This rule applies even if the husband and wife have separate businesses and each have an independent business connection with the recipient.
Exceptions
Question: Are there any exceptions to the $25 limitations on business gifts?
Answer: Yes, there are three major exceptions: (1) One exception covers an item costing $4 or less on which the name of the taxpayer is clearly and permanently imprinted and which is one of a (Continued on page 22)
n New Marble Quarry
The world's largest producer of marble and limestone is tapping a new source of white marble in central Vermont.
The Georgia Marble Company, of Tate, Georgia, has awarded Dravo Corporation, Pittsburgh, a contract to sink a 120-foot deep mine shaft for the company's Green Mountain Marble Division in West Rutland, Vermont. Completion of the shaft is expected early in 1964.
This will be only the second shaft-access underground marble quarry in North America, the other being operated by the same company at West Rutland. Marble normally is quarried from an open pit or through a tunnel into the side of a hill.
The new shaft will reach a 40-foot thick layer of white marble, buried beneath 75 feet of glacial till and 35 feet of limestone and sloping about 15 degrees to the east.
women in the back seat of a car haranguing her husband, who sat behind the wheel. After a severe reprimand for reckless driving, she finished with: "And furthermore, Henry. When we are driving, it is not necessary to preface each remark you make with 'Pilot to Navigator.'"
SONRY December, 1963
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