8-33 Entertainment Expenses. R operates his own company that manufactures and distributes office supplies. He is considered self-employed. During the year, he and the company paid various expenses relating to entertainment. In each of the following situations, indicate the amount of the deduction for entertainment expenses. Briefly explain your answer and classify the deduction as either for or from adjusted gross income. (Assume all the substantiation requirements are satisfied.)

1. R and his wife took a potential customer and his wife to a concert to hear a tribute band to the Beatles. Tickets for the event cost $60 each. R was unable to discuss any business during the evening.

2. After agreeing in the afternoon to supply Ss company with all of his printing needs, R took S to a hockey game that evening. Tickets were $40 each. The company reimbursed R $80 for the tickets under an accountable plan.

3. R and S, a client, went to lunch at Rs favorite fish joint, right on the Gulf. R paid the bill for both his meal, $30, and Ss meal, $40. They discussed business during lunch.

4. The company organized a seminar for current and potential clients concerning the office of the future. Typically, the company provided a meal followed by a presentation. One presentation was held at the companys brand new headquarters followed by dinner prepared and served by a high-end catering company. Another was held at one of citys finest restaurants.

5. R purchased a vacation condominium in Maine for use primarily by its employees. Expenses relating to the condominium, including depreciation, maintenance, utilities, interest, and taxes, were $7,000.

6. R joined an exclusive country club this year. The membership fee, which is not refundable, was $1,000. In addition, R paid annual dues of $3,600. During the year, R used the club 100 days, 70 days for entertainment directly related to business and 30 days for personal use.

7. R gave one of the companys best customers a $100 bottle of wine. h. Rs company gave one of its retailers 1,000 golf balls ($1 each) to distribute for promotional purposes. The companys name was imprinted on the balls.