What the IRS Says

The Tax Cuts and Jobs Act of 2017 eliminated the deduction for most business entertainment expenses, including tickets to concerts, sporting events, and shows. Exceptions: (1) Entertainment industry professionals -- a music producer, talent agent, or promoter attending shows may deduct tickets as ordinary and necessary business expenses. (2) Client gifts -- up to $25 per recipient per year is deductible. (3) Business meals -- a meal before or after the event (50%) is deductible separately.

How to Structure This Properly

Getting the deduction right is not just about whether it is allowed — it is about how you set it up.

1

Establish Business Use

2

Track Usage and Documentation

3

Choose the Right Structure

4

Avoid Common Mistakes

5

Optimize for Maximum Benefit

If you are in the music or entertainment industry, tickets to competitor shows, industry events, or research screenings are deductible as business expenses.

When structured correctly, this deduction can significantly reduce your taxable income.

Real Examples

Here is how this deduction typically works in real situations:

freelancer

Result: Deducts ticket costs as ordinary and necessary business expenses on Schedule C with documentation.

Audit Risk: medium

llc

Result: Deducts $25 per recipient ($50 total) as a client gift under IRC §274(b).

Audit Risk: low

mixed

Result: Deduction disallowed. Business entertainment deductions were eliminated by the TCJA in 2018.

Audit Risk: high

Key Takeaway: The difference between a valid deduction and a denied one usually comes down to documentation, usage percentage, and proper structuring. The same expense can be fully deductible, partially deductible, or not deductible at all — depending on how it is handled.