club_cafe: Meal expenses

Arthur Klages on

Ira.....

Our Operating Agreement (By Laws for an LLC) states "Regular meetings shall
be held at noon at the first Tuesday of each month. Lunch shall precede the
business meeting and shall be paid for by the Treasurer from Company Funds.
Special meetings may be called by the President, the wives of Members and
special guests may be invited to the meetings."

Since we buy and sell stocks at these meetings I believe that we do
conduct business as it definintely related to producing taxable income.at
these meetings Therefore, the expense is 50% deductible.

Actually, I enter the bill as 50% meeting space rental and 50% as
non-deductable food and drink.

Shouldn't this pass muster?

Arthur Klages

-----Original Message-----
From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of
IraS1@aol.com
Sent: Monday, March 10, 2008 2:55 PM
To: club_cafe@bivio.com
Subject: Re: club_cafe: Meal expenses

I'm not sure why I would have referenced those pages with regard to
(dis-)allowed expenses. Instead look at pages 35-37. The only deductible
expenses are those that are directly related to the production of taxable
income. Eating a meal isn't one of them. That's a personal living expense.

Ira Smilovitz

In a message dated 03/10/08 2:43:02 P.M. Eastern Daylight Time,
acklages@bivio.com writes:

        Several weeks ago you advised that meal expenses were not deductible
and quoted IRS Pub 550, pages 26 & 27.

        I looked this over and couldn't find any reference to expensing.

        Could you please help me out on this?


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Rip West on

Arthur,

Since we buy and sell stocks at these meetings I believe that we do
conduct business as it definintely related to producing taxable income.at
these meetings Therefore, the expense is 50% deductible.

Actually, I enter the bill as 50% meeting space rental and 50% as
non-deductable food and drink.

Shouldn't this pass muster?
>>

You keep ignoring the main point that the IRS does NOT consider investing to be a business. So, according to them, you do not 'conduct business'. You believe it is definitely related to 'producing taxable income', but the IRS has a long and consistent practice of not allowing expenses to investment seminars, which could certainly be argued to be related to producing taxable income.

Now, if you want to argue that no one will ever call you to account on this issue, I would agree, but I will continue to disagree that it is deductible under the IRS regulations.

Rip West
Saint Paul, MN

Gene Rooks on

Arthur, by paying for meals out of club funds, deductible or non-deductible,
you are seriously reducing the money available for investment, unless you
want to consider yourselves more a social club than an investment club.
And by the way, how do you allocate these funds, by membership share or
equally by member?

It is not what you consider business, as what the IRS considers business,
which is offering goods and services to the public, which you are not doing.

Gene Rooks, Space Coast Chapter

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