Dynamic Business Solutions Inc

A specific business benefit is expected to result from the discussions immediately before, during, or immediately after the meal or event, such as a meal with a business person to discuss the employer’s products/services.

The cost of the meal or entertainment is “reasonable.” The IRS deems “lavish and extravagant” a meal or entertainment event to be nondeductible. Because the line between “reasonable” and “lavish and extravagant” is unclear, be prepared to justify the expense in relation to the business benefit actually derived or at least anticipated.