The new tax law (TCJA) has made several changes in the deductibility of business meals and entertainment.  Last week I addressed deductions for meals. This week I will discuss the deductibility of entertainment expenses.  Even before the new tax law, expenses for entertainment were generally disallowed with two exceptions: (1) was the expense directly related to the active conduct of the business or (2) did the activity directly precede or follow a substantial and bona fide business discussion.  If the activity met one of the two exceptions, a 50% deduction was generally allowed.  Under the new law the two exceptions have been removed and now an objective test is used to determine deductibility on a case-by-case basis.  There are certain exceptions to the non-deductibility rule stated in the new law, some of which are: (1) expenses directly related to business meetings with shareholders, etc., (2) expenses related to attending conventions, etc., and (3) entertainment sold to customers for full compensation  Also see the exceptions listed in last week’s blog.