Publication 17
taxmap/pub17/p17-063.htm#en_us_publink1000171969If you host a party or event at which sales are made, any gift
or gratuity you receive for giving the event is a payment for helping a direct
seller make sales. You must report this item as income at its fair market value.
Your out-of-pocket party expenses are subject to the 50% limit
for meal and entertainment expenses. These expenses are deductible as
miscellaneous itemized deductions subject to the 2%-of-AGI limit on Schedule A
(Form 1040), but only up to the amount of income you receive for giving the
party.
For more information about the 50% limit for meal and entertainment
expenses, see
chapter 26.
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