R.16 Special requirements to substantiate business gifts

As long as you can make the connection between the person receiving the thank you gift and a legitimate business purpose (including promoting your business to potential customers) you may deduct business gifts of up to $25.00 per recipient.

Consider the people who might receive a business gift. Who are people who help you in your business by functioning as informal advisers? Do you have a friend or family member who is self-employed or has particular expertise in farming, ranching, marketing or accounting and taxation? A thank-you gift can be a nice way to acknowledge that you appreciate their continued mentorship. 

For more information see IRS Publication 463, Travel, Gift, and Car Expenses

This resource is derived from materials developed by the University of Arkansas School of Law Agricultural Tax Training as part of the Agricultural Financial, Tax and Asset Protection (AgFTAP) partnership with the University of Arkansas Southern Risk Management Education Center and others.