Chapter 2 Entertainment Expenses You may be able to deduct business-related entertainment expensesyou have for entertaining a client, customer, or employee. The rulesand definitions are summarized in Table 2. You can deduct entertainment expenses only if they are bothordinary and necessary and meet one of the following two tests. Directly-related test. Associated test. Caution: hotel reviews BudardalurThe amount you can deduct for entertainment expenses may belimited. Generally, you can deduct only 50% of your unreimbursedentertainment expenses. This limit is discussed later under 50%Limit. Club dues and membership fees.You cannot deduct dues (including initiation fees) for membershipin any club organized for business, pleasure, recreation, or othersocial purpose. This rule applies to any membership organization ifone of its principal purposes is to conduct entertainment activitiesfor members or their guests, or to provide members or their guestswith access to entertainment facilities, discussed later. The purposes and activities of a club, not its name, will determinewhether or not you can deduct the dues. You cannot deduct dues paid tocountry clubs, golf and athletic clubs, airline clubs, hotel clubs,and clubs operated to provide meals under circumstances generallyconsidered to be conducive to business discussions. Entertainment facilities.Generally, you cannot deduct any expenses for the cost of using anentertainment facility. This includes expenses for depreciation andoperating costs such as rent, utilities, maintenance and protection. five star hotel in CopenhagenAn entertainment facility is any property you own, rent, or use forentertainment. Examples include a yacht, hunting lodge, fishing camp,swimming pool, tennis court, bowling alley, car, airplane, apartment,hotel suite, or home in a vacation resort. Out-of-pocket expenses.roulette enligne reglesYou can deduct out-of-pocket expenses, such as for food andbeverages, catering, gas, and fishing bait, that you provided duringentertainment at a facility. These are not expenses for the use of anentertainment facility. However, these expenses are subject to thedirectly-related and associated tests and to the 50% limit, alldiscussed later. What Entertainment Expenses Are Deductible?