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Investopedia explains 'Clear Business Setting Test'
Qualifying expenses can include meals and entertainment related to generating publicity, price rebates for regular hotel or restaurant customers, and the cost of renting a display room at a convention. Usually, however, the taxpayer must be present at the function and there cannot be substantial distractions, such as at a nightclub or sporting event. If the associates present are a mixture of business and personal associates, then the costs incurred are also generally nondeductible.
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