A company pays $15,000 of country club dues for its chief fundraising officer. The officer
spends 60% of his time at the club entertaining business clients. The remaining 40% of his
time in the country club is personal. What is the proper tax treatment of the $15,000 dues
expense?
The company deducts $9,500, and the officer reports $6,000 on his tax
return as compensation.
The company deducts $6,000, and the officer reports $6,000 income as
compensation.
The company deducts $15,000, and the officer reports $15,000 income as
compensation.
The company has no deduction for the club dues.