Want to guess why the IRS limits Realtor gifts to clients to a measly $25 per person, per year? (at least, that’s the most that can be deducted).
A. The IRS doesn’t think Realtors should give clients gifts.
B. The IRS is worried about Realtors kicking back their commissions to clients.
C. Clients don’t like getting post-closing gifts from Realtors.
D. The amount was set in 1956, and has never been adjusted for inflation.
Correct answer: “D.”
At least, that’s the explanation I heard at a tax-and-business training seminar yesterday.
Back in 1956, when the average U.S. home was something like $24,000, that $25 must have seemed positively lavish.
Adjusting for inflation, a comparable gift today would be about $213.
