Can you get a tax write off for taking your spouse and kids to see a Rolling Stones concert?
You’re probably thinking “you can’t always get what you want.” So of course the answer must be no.
Well, you’ll be surprised that sometimes, with the right tax planning, not only can you get what you need but you can also get what you want.
Before you start Jumping Jack Flash, let’s take a closer look at how the IRS lets you claim the deduction.
Mick and Keith are both California attorneys. Along with their wives and their kids, they arrange to attend the three-day American Bar Association convention in Toronto. They and their families stay at the Fairmont Royal York where the convention is being held (as we mentioned in a previous article, the lodging in Toronto to attend the convention qualifies as fully tax deductible, regardless of their families being present).
While attending the convention, Mick and Keith realize the Rolling Stones are playing four shows at the Air Canada Centre(ACC) across the street from the convention. Being fans of the Stones since the release of the Aftermath album(highly underrated), they decide to take their families to see the concert one night after the convention concluded.
Is there a way Mick and Keith can deduct the ticket costs to see the Stones plus the beer and food consumed at the ACC for them and their families?
Yes, because the costs of the tickets and the expenses incurred at the concert are tax deductible as associated entertainment. The tax code allows a taxpayer to deduct entertainment that is associated with a substantial and bona fide business discussion. Per the IRS regulations, attending the convention automatically qualifies as a substantial and bona fide business discussion. Therefore, Mick and Keith going to the Stones concert on the same day as they attended the convention makes the concert entertainment associated with a substantial and bona fide discussion. Even better, while Mick and Keith are at the concert, they can spend their time reminiscing about the past Stones shows they’ve seen instead of discussing business because the IRS considers the business discussion to have taken place at the convention. Who said the tax code doesn’t give you any Satisfaction?
But how does the tax code allow a deduction for Mick and Keith’s families?
Simple, a taxpayer is allowed to claim the associated entertainment deduction for a person who is “closely connected” to the person who is engaged in a substantial and bona fide business discussion. It’s hard to argue a spouse and children are not closely connected. Moreover, it doesn’t even matter if there is no business reason to deduct the cost of the entertainment associated with your spouse and kids.
While it’s Only Rock N Roll, it’s hard not to like how the tax code let’s you Spend the Night Together with your family and friends and claim a business write off all the same time.