What the IRS Says

The Tax Cuts and Jobs Act of 2017 eliminated the deduction for business entertainment expenses, including sports tickets. Before 2018, you could deduct 50% of sports tickets used for client entertainment. Now, the deduction is $0 for entertainment purposes. Exceptions: (1) Client gifts -- up to $25 per recipient per year. (2) Sports industry professionals -- a sports agent, team executive, or sports journalist may deduct tickets as ordinary and necessary business expenses. (3) Charitable sporting events -- tickets may be deductible as a charitable contribution.

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

Consider purchasing a suite or premium package for a client event and deducting the food and beverage costs (50%) separately from the entertainment.

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 with thorough documentation.

Audit Risk: medium

llc

Result: Deducts $25 per recipient ($50 total) as a client gift. The remaining $150 is not deductible.

Audit Risk: low

mixed

Result: Entertainment deduction disallowed. Only separately stated food and beverage costs (50%) are deductible.

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.