Most gifts are for close friends or family members and are personal in most cases. Any demonstration of Amway products would have a minimal cost to the distributor and should be well documented as to when, where, why, and who. The demo products should be kept separate. Using a small sample of a product for demonstration and then using the rest for personal use is a personal expense. Taxpayers frequently write off long distance calls to friends and refatives claiming they were trying to sign up downlines or sell product.
Many taxpayers try to write off their entire phone bill.
In most cases, use of the home is not allowed because of the loss. The examiner should be aware that expenses may be disguised to avoid the limitation. Most of the tapes do not have anything to do with selling Amway products. Unless the taxpayer can furnish specific information showing the tapes or books are for the purpose of promoting and selling the products, they should not be allowed as a business deduction. As with all Amway products deducted as an expense, the examiner should verify these items have been removed from purchases in the Cost of Goods Sold.