Are Closing Gifts Tax Deductible?

One of the questions our clients ask most often is whether closing gifts are tax deductible. The answer is, unfortunately, no. Closing gifts are considered to be personal expenses and are not tax deductible. However, there are a few ways to make your closing gift tax deductible.

As a general rule, closing gifts are not tax deductible. This is because they are considered to be personal expenses. However, there may be some exceptions depending on the gift type and the purpose it was given. For example, if you give a closing gift to a client as a thank-you for their business, that gift may be tax deductible as a marketing expense. You would need to speak with your accountant or tax advisor to determine whether any exceptions apply in your case.

How Much of a Closing Gift is Tax-Deductible?

It’s no secret that closing gifts can be a great way to show appreciation for your clients. But many people need to realize that, in some cases, these gifts can also be tax-deductible. Here’s a quick rundown on how the IRS treats closing gifts: 

The amount that can be deducted depends on the type of gift. If the gift is given to the buyer at settlement, it is considered part of the purchase price and is not deductible. However, if the gift is delivered after settlement (for example, at the housewarming party), it is considered a separate transaction and may be deductible. 

For example, tickets to a ball game or a bottle of wine would generally only be 50% deductible (as entertainment expenses). However, a painting or sculpture could be 100% deductible as a charitable contribution. Of course, as with anything related to taxes, it’s always best to speak with a qualified tax professional before making assumptions about what is and isn’t deductible. They can give you specific advice based on your unique situation.

Can Business Gifts Be Tax Deductible?

Are Tenant Gifts Tax Deductible?

If you own a rental property, you may wonder if tenant gifts are tax deductible. The answer is maybe. If the gift is given to generate income from the property, it may be considered a business expense and, therefore, tax deductible. Deducting a tenant gift as a business expense must meet certain criteria.

-First, the gift must be usually used in your business. However, if the gift is given to be nice or as a thank you for being a good tenant, it is not tax deductible. 

-Second, the gift must have some value that can be quantified. For example, a set of dishes or linens would not normally be used in your business, so they would not qualify as a deduction. A box of chocolates might make your tenants happy, but it doesn’t have any real monetary value, so it wouldn’t qualify as a deduction. 

-Finally, the gift must be given with the expectation of receiving something in return – usually, rent payments! Giving your tenants a holiday bonus with no strings attached is not tax deductible because there was no quid pro quo involved. When you need clarification on whether a tenant gift is tax deductible, ask your accountant or financial advisor for guidance.

Are Client Gifts Tax Deductible?

The holidays are when many businesses give gifts to clients, customers, and employees. But what about the tax implications? Are client gifts tax deductible? The answer is: it depends. According to the IRS, business gifts are tax deductible if they meet certain criteria. The gift must be given for business purposes and be reasonable in value. 

The gift cannot be exchanged for something of equal or greater value. So, if you’re considering giving a gift to a client this holiday season, ensure it meets the above criteria. Otherwise, you may not be able to deduct it come tax time.


If you’re wondering whether closing gifts are tax deductible, the answer is no. Closing gifts are considered personal expenses and are not tax deductible. So if you’re looking to save on taxes, you’ll have to look elsewhere.

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