Can shareholders of a SubS corporation deduct routine business lunches where discussion of clients and planning occur under new 2018 tax rules? 50% limit applied?

[abctax55 · Accepted solution]

The * shareholders * can't....employee expenses/Form 2106 is gone for 2018.

 The S-corp probably can (see TGB's comment).

[TaxGuyBill]

I missed that wording about the "shareholders" deducting the expenses.   :smile:

[abctax55]

That's OK....I don't really think that's what the OP meant.  :smiling_imp:

[TaxGuyBill]

Those rules have not changed for 2018.  IF they are deductible, they would be subject to the 50% limit.

However, I'm concerned about the words "routine" and "occur".

If the purpose of getting together is for a business discussion and that is the primary conversation, yes, it would be deductible.  If they were having lunch and just happened to discuss some business stuff, no, that probably not be deductible.