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employees and customers, to promote goodwill, was an ordinary and
necessary business expense). Furthermore, the evidence contained
in the record establishes the dollar amount for each of these
expenditures, indicates that the items were given at Christmas,
describes the nature of the items given, stipulates that they
were distributed either as “promotional” items or “bonuses”, and
identifies the names of the corporate customer or employee
recipients and their roles as such. We are convinced that this
information comports with the requisites of sections 162 and
274(d). Moreover, we believe that respondent’s allowing of a $25
deduction for each gift certificate and for the majority of the
gift baskets represents an implicit concession that the
underlying requirements for substantiation have been satisfied on
these facts. We thus conclude that to the extent section 162 is
and section 274(d) may be applicable to the expenses at issue,
the necessary factual basis for deductibility has been shown on
this record. We therefore turn to the question of whether other
legal principles preclude or limit the available deductions with
respect to each of the three forms of expenditure in contention.
B. Other Limitations on Deductibility
1. Gift Certificates
Petitioners contend that the expenditures made for the gift
certificates are fully deductible and are not limited by section
274(b) to a deduction of $25. Petitioners maintain that these
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