# Are Doughnuts Tax Deductible? It depends.



## UberTaxPro (Oct 3, 2014)

I came across this today and thought you might find it amusing. It's a great example of just how confusing our tax code can be. When people ask " is this deductible?", the answer is usually "it depends." 

A simple box of donuts can have to be coded 10 different ways. Once coded, the donuts could then show up on at least 7 different tax forms. (Schedule C, 1120, 1120S, 1065, 990, Form 2106 and Schedule A)
It's never as simple as just buying a box of donuts.
- No Deduction - I buy a box of donuts and eat the whole thing while in town at my tax home. (Note, this would be 50% deductible if you were out of town traveling for business.)
- 50% Deductible Business Expense - I buy a box of donuts and share them with the 10 people in my first sales meeting of the day
- 50% Deductible Non-Reimbursed Employee Expense - Same as above, but now I'm an employee and my employer requires me to supply food in my business meetings, but doesn't reimburse me for it. (While this is still 50% deductible, it's an itemized deduction and won't even begin to count until you've crossed the threshold of 2% of your income.)
- 100% Deductible Business Expense - I buy a box of donuts, takes them to my first sales call and leave them in their lobby by the coffee for all to enjoy...even people off the street.
- 100% Deductible Non-Reimbursed Employee Expense - Same as above, but now I'm an employee and my employer requires me to supply food in my business meetings, but doesn't reimburse me for it.
- 80% Deductible Business Expense - I buy a box of donuts that I use as breakfast and lunch while driving my big rig across the country. (I'm subject to DOT rules.)
- 80% Deductible Non-Reimbursed Employee Expense - Same as above, but now I'm an employee and my employer doesn't have any provision for meals while I drive.
- 100% Deductible Personally - I buy a box of donuts and donate them to the church bake sale. (This is deductible, but it's only on the personal return...even if you did this for a Corp, it would still pass through to the shareholders and wouldn't be deductible at the corp level.)
- 100% Deductible as COGS - I buy a box of donuts to resell.
- 100% Deductible as an Ordinary and Necessary Business Expense - I buy a box of donuts to use as a prop during a tax talk where I discuss the ways a box of donuts can be coded.
Now, who wants a donut?


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## Older Chauffeur (Oct 16, 2014)

I'll have a maple bar, please!


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## UberBastid (Oct 1, 2016)

Only if you are a cop


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## SEAL Team 5 (Dec 19, 2015)

UberTaxPro said:


> I came across this today and thought you might find it amusing. It's a great example of just how confusing our tax code can be. When people ask " is this deductible?", the answer is usually "it depends."
> 
> A simple box of donuts can have to be coded 10 different ways. Once coded, the donuts could then show up on at least 7 different tax forms. (Schedule C, 1120, 1120S, 1065, 990, Form 2106 and Schedule A)
> It's never as simple as just buying a box of donuts.
> ...


How much of a deduction is a donut if you bribe a cop to get out of a speeding ticket?


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## Mars Troll Number 4 (Oct 30, 2015)

SEAL Team 5 said:


> How much of a deduction is a donut if you bribe a cop to get out of a speeding ticket?


Bribes arn't tax deductible, according to wikipedia

https://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_the_United_States

*Deductions relating to unlawful conduct may be disallowed when to allow them would sharply frustrate a national or state policy prohibiting such conduct.*[15]

Congress may impose specific provisions that prohibit deductions in connection with illegal activity or other violations of law. No deduction is allowed for fines or similar penalties paid to a government for the violation of any law.[16]

Internal Revenue Code section 280E specifically denies a deduction or credit for any expense in a business consisting of trafficking in illegal drugs "prohibited by Federal law or the law of any State in which such trade or business is conducted."[17]

Similarly, no business deduction is allowed "for any payment made, directly or indirectly, to an official or employee of any government [ . . . ] if the payment constitutes an illegal bribe or kickback or, if the payment is to an official or employee of a foreign government, the payment is unlawful under the Foreign Corrupt Practices Act of 1977."[18]* Similarly, tax deductions and credits are denied where for illegal bribes, illegal kickbacks, or other illegal payments under any Federal law, or under a State if such State law is generally enforced, if the law "subjects the payor to a criminal penalty or the loss of license or privilege to engage in a trade or business."*[19] No deduction is allowed for kickbacks, rebates, or bribes made by those who furnish items or services for which payment may be made under the Social Security Act.[20]


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## SEAL Team 5 (Dec 19, 2015)

Mears Troll Number 4 said:


> Bribes arn't tax deductible, according to wikipedia
> 
> https://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_the_United_States
> 
> ...


And who says that you don't learn anything on social media? Let me rephrase my question then. How much of a deduction is a donut if you "*DONATE*" it to your local Police Athletic League (PAL) to get out of a speeding ticket?


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## UberTaxPro (Oct 3, 2014)

Mears Troll Number 4 said:


> Bribes arn't tax deductible, according to wikipedia
> 
> https://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_the_United_States
> 
> ...


Speeding tickets aren't deductible either!



SEAL Team 5 said:


> And who says that you don't learn anything on social media? Let me rephrase my question then. How much of a deduction is a donut if you "*DONATE*" it to your local Police Athletic League (PAL) to get out of a speeding ticket?


You're gonna have to donate more than a donut! You're talking at lest 2 or 3 dozen, a keg or 2 of Jo and some bagels! I've seen them eat at the local PAL!


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