A) No deduction is allowed for expenses allocable to a meeting held outside the North American area (“North America” includes Canada, Mexico, Puerto Rico, U.S. Virgin Islands and the Caribbean Basin “beneficiary countries”), unless: 1) The meeting is directly related to active conduct of the taxpayer’s trade; and 2) It was “as reasonable” for the meeting to be held outside the North American area as within it.
B) Taxpayers who attend meetings directly related to the active conduct of business, held on U.S. flagships, cruising only to U.S. ports are allowed a limited business expense deduction up to $2000 per year. (Two information statements are also required).
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