On 12/3/2017 10:16 AM, Ronal B Morse wrote:
Adrian, is there a reason you treat the rebate as a negative expense
instead of miscellaneous (non-taxable) income? To me, the rebate is
something you get rather than something you don't give, but my
analysis could be incorrect, and if it is I'd like to know.
RBM
Yes, very good reason. So as not to overstate (both) income and
expenses. You did NOT have as an expense the full amount and then income
of the difference between the (actual) discounted expense and the full
price.
It might help if I gave a concrete example why this is not arbitrary?
To do that we will need to increase the amounts and put this into a
context where there is a specific regulation. I will use for the
regulation US IRS rules for 501(c)3s << charitable non-profits >>
Regulation: If gross income > $100,00 file the 990, if not, but >
$25,000 file the 990-EZ, if under that file just the electronic postcard
990-N << just indicates "we still exist", no details >>
Situation: Organization with all other income of $24,500 hires work done
for $3,000 but then the vendor says that will give a 20% discount to
non-profits. If this is treated as $600 of extra income, must file the
990-EZ instead of just the 990-N.
Michael D Novack
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