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Season tickets: One of the most overlooked deductions are those for season tickets. Do you own season tickets to a show, playhouse, dinner theater, museum or sporting event? If you do, did you write off the tickets? I’d bet that you didn’t.
The cost of the season tickets can be deductible if you know the rules and do it correctly.
Rules that you need to know:
- Each season ticket consists of admission to a number of events. Each event stands by itself.
- You can only deduct the cost of that event if you talk business either preceding or following the event with a prospect that you attended the event with or arranged to meet with that prospect at the event and talked business with them.
- The most you can write off is 50% of the cost of the tickets.
- You can only write off the face value of the tickets. Scalper’s fees and markups are not deductible.
Example A: I pay $1,000 as a yearly “donation” to the Hurricanes in order to pay $1,500 for their season tickets. I can deduct up to 50% of both the $1,000 and $1,500. Requiring a “donation” to buy tickets is considered part of the price of the tickets and not a charitable donation.
Example B: I pay $2,000 for season tickets to the Miami Dolphins. I can attend eight home games. If I talk business with eight different prospects and document this discussion in Taxbot, I can deduct 50% of my $2,000 cost, which equals $1,000.
Example C: I pay $2,000 for season football tickets. I only bring prospects and talk business to 5 people at five different games. However, I attend the other three games with my spouse or young kids, 5/8ths of season ticket cost is deemed used for business , and I can deduct this cost times 50%. Thus, my deduction is 5/8 X $2,000 X 50%= $625.
Example D: I paid a scalper $10,000 to obtain Superbowl tickets that normally cost $3,000. If I talk business with a prospect that I attended the game with, I can deduct 50% of the $3,000 and none of the markup that I paid the scalper.
The key is that you MUST document in your tracker: who you discussed business with, the date of discuss, the cost of the tickets,the type of event, and what was discussed. You also do NOT have to pay for your prospect in order to deduct your share of the tickets.
Hopefully, this discuss will help you understand the rules so that you can take advantage of a big, overlooked deduction,which should make your life less taxing.
Material derived from my book, “Lower Your Taxes: Big Time” and blogs and videos found on Taxbot.com
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