Which of the following best describes the term "business gifts" in tax context?

The term "business gifts" in a tax context refers specifically to gifts that are subject to certain limitations when it comes to deductibility. The correct response highlights that there is a cap on the allowable deduction for business gifts, which is set at $25 per recipient per tax year. This means that while businesses can give gifts to clients and customers, the IRS restricts the deductible amount to ensure that businesses do not excessively deduct large gifts.

This limit encourages businesses to be modest in their gifting practices and helps the IRS to monitor and regulate how businesses allocate resources for client relations and marketing. Any gifts that exceed this $25 limit are not eligible for tax deduction, aligning with this established rule in tax regulation.

The other choices do not accurately capture the correct definition or context of business gifts. For instance, stating that tax-deductible gifts exceed $100 misrepresents the IRS guideline regarding the limit. Similarly, not all gifts given to clients can be considered business gifts for the purpose of deductibility, and gifts given solely for promotional purposes could fall under different tax guidelines. Therefore, the specific mention of the $25 limit is what makes this option correct in the tax context.