Deducting a gift

In order to deduct a gift, record the cost of the gift, the date it was given and a description. Of course, you must identify the business reason for the gift or the business benefit gained or expected to be gained from providing it. Include the name of the person receiving the gift, his or her occupation or other identifying information and his or her business relationship to you.

A canceled check, along with a bill, generally establishes the cost of a business item. However, the check alone does not prove a business expense without other evidence of its business purpose.