Entertainment Facilities as business expenses
This would include yachts, hunting camps, fishing camps, swimming pools, tennis courts, , clubs, barges. Hence for the most part the purchase is affected, but not the out of pocket expenditures for this item. So operating expenses are ok, if you can directly tie to an actual business purposes to specific people.
Club dues are different. The IRS does not want us deducting club dues organized for business, pleasure, recreation or other social purpose such as country clubs, golf clubs, athletic clubs, hotel luncheon clubs, or business luncheon clubs despite the fact that is how a great deal of sales and networking is conducted in this country. They do allow us an exception for civic or public services service like Rotary, Kiwanis.
I have found that if there is to be significant expenses with a facility, it can be useful to set up a separate operating company to operate the yacht or barge or whatever. This can then be used to rent to others which legitimizes the whole thing and breaks out the problem child from the business.
