![]() Existing Treasury regulations define "entertainment" using an objective standard, including activity "of a type generally considered to constitute entertainment," such as "entertaining at night clubs, cocktail lounges, theaters, country clubs, golf and athletic clubs, sporting events." ![]() This repeal effectively eliminated business entertainment deductions. The TCJA repealed the exception from IRC Section 274(a) that preserved a deduction for business entertainment if directly related to or associated with the active conduct of business. IRC Section 274(a), as modified by the TCJA, disallows any otherwise allowed income tax deduction for an activity or facility that qualifies as entertainment, amusement or recreation. The final regulations apply to tax years beginning on or after publication (scheduled for October 9, 2020) in the Federal Register (2021 in the case of a calendar-year taxpayer). ![]() The final regulations generally adopt the proposed regulations (REG-100814-19 see Tax Alert 2020-0442) issued in February 2020, with some changes made in response to public comments. In final regulations ( TD 9925), the Treasury Department and IRS clarified business expense deduction disallowances under IRC Section 274 for entertainment and food or beverage expenses after the Tax Cuts and Jobs Act (TCJA) eliminated the deduction for entertainment expenses. Final regulations clarify deduction disallowances for IRC Section 274 entertainment and food or beverage expenses
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