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benefit derived or expected to be derived as a result of travel.
Sec. 1.274-5T(b)(2), Temporary Income Tax Regs., 50 Fed. Reg.
46014-46015 (Nov. 6, 1985).
The elements that a taxpayer must prove with respect to an
expenditure for entertainment are: (1) The amount of each such
expenditure for entertainment, except that incidental items such
as taxi fares or telephone calls may be aggregated on a daily
basis; (2) the time of each such expenditure, i.e., the date of
the entertainment; (3) the place of each such expenditure, i.e.,
the name, if any, the address or location, and, if not apparent
from the designation of the place, the designation of the type of
entertainment, such as dinner or theater; (4) the business
purpose of each such expenditure, i.e., the business reason for
the entertainment or the nature of business benefit derived or
expected to be derived as a result of the entertainment and,
except in the case of business meals described in section
274(e)(1), the nature of any business discussions or activity;8
8If a taxpayer claims a deduction for entertainment directly
preceding or following a substantial and bona fide business
discussion on the ground that such entertainment was associated
with the active conduct of the taxpayer’s trade or business, the
taxpayer is not required to establish the fourth element set
forth above that is otherwise required with respect to a deduc-
tion for entertainment. Instead, the taxpayer must establish the
following: (1) The date and the duration of the business discus-
sion; (2) the place of the business discussion; (3) the nature of
the business discussion and the business reason for the enter-
tainment or the nature of the business benefit derived or ex-
pected to be derived as the result of the entertainment; and
(4) the identification of the persons entertained who partici-
(continued...)
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