Limits on nonbusiness activities paid for by the Company

The American Jobs Creation Act of 2004 has changed the deductibility of some of the costs associated with non-business activities. This change impacts those companies that have airplanes, boats, or other recreational vehicles or facilities that are used for both business and personal use. For business use of an asset such as an airplane, boat, beach house, etc the rules remain the same. For personal use and entertainment use by specified individuals (officers, directors and 10% or greater owners of the company), the business deduction  for the cost is limited to the amount of income that is added to the specified individual’s W-2. 

This is effective for expenses incurred after October 22, 2004.

If you have any questions regarding the application of this part of the American Jobs Creation Act of 2004, please contact Jennifer Burmester, CPA.

Sincerely,

Large & Gilbert, P.C.

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