This Daily Tax Tip Spotify Podcast and/or WordPress Blog Post discusses the Tax Court case Anikeev v. Commissioner, Tax Court Memorandum 2021-23.
The Tax Court held that a couple who acquired rewards from American Express equal to 5 percent of their purchases of:
- prepaid Visa gift cards,
- money orders, and
- reloadable debit cards,
All were paid to them in the form of statement credits against their American Express bills which is realized income in the amount of the rewards relating to the money orders and debit cards, but not the Visa gift cards.
The court found that the Visa gift card purchases were for goods and services and therefore the rewards were rebates that resulted in a downward price adjustment of the gift cards; however, rebate treatment did not apply for the purchases of money orders and debit cards because no product or service was obtained with those purchases.
Please note for our Spotify members, an Adobe file copy of Anikeev v. Commissioner, Tax Court Memorandum 2021-23 is available on our blog post.
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