Deducting the Cost of Tickets to Theater or Sporting Events

Theater or sporting event tickets purchased for business associates are treated as an entertainment expense provided you accompany your associates to the event. You may only deduct 50% of the face value of the tickets even if you actually pay more (for example, to a ticket agent or scalper).


You pay $150 for a ticket with a face value of $50. You may only deduct $25 (50% x $50) as an entertainment expense.

If you buy tickets only for your associates and not for yourself and you don't attend the event, you have two choices for deducting the cost of the tickets:

  1. Treat the tickets as a gift and deduct up to $25 per ticket, or
  2. You may treat the tickets as an entertainment expense and deduct 50% of the face value of each ticket, provided you can show that a business discussion took place either before or after the event.
    • If you don't attend the event, you don't satisfy the "directly related" test. However, if you have a business discussion before or after the event you would satisfy the "associated test". Keep in mind, to claim the entertainment deduction you must satisfy either the "directly related" test or the "associated" test.
      • To meet the associated test for entertainment expenses (including entertainment-related meals), you must show that the entertainment:
        • Is associated with the active conduct of your trade or business, and
        • Occurred directly before or after a substantial business discussion, which means, you can show that you actively engaged in the discussion, meeting, negotiation, or other business transaction to get income or some other specific business benefit.

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