Author Topic: Help with expenses purchased with gift cards...  (Read 1450 times)

Tr10av

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Help with expenses purchased with gift cards...
« on: January 23, 2017, 10:29:22 AM »
I've done some searching on the forums and on-line but haven't found anything that relates to this situation:

I have gotten into the habit of purchasing gift cards for discounted rates through giftcardgranny.com. If you're not familiar, this website is a marketplace where you purchase gift cards at a discount to value. My question is in regards to using these for expenses related to a business, which in my case is land lording. If I purchase $100 of Home Depot gift cards for $90 and then buy items at Home Depot that total $100 is my expense $100 or $90? Is there any IRS publication that covers this scenario?

Any insight or advice would be appreciated.



dandarc

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Re: Help with expenses purchased with gift cards...
« Reply #1 on: January 23, 2017, 10:32:17 AM »
$90.  You can't deduct as a business expense more than you actually paid, generally.  If you bought the gift card with a rewards credit card, you should further reduce the amount by the value of the rewards you received.

Still a good way to reduce cost - but you don't get to further subsidize with a tax break on money not actually spent.

Tr10av

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Re: Help with expenses purchased with gift cards...
« Reply #2 on: January 23, 2017, 10:41:17 AM »
$90.  You can't deduct as a business expense more than you actually paid, generally.  If you bought the gift card with a rewards credit card, you should further reduce the amount by the value of the rewards you received.

Still a good way to reduce cost - but you don't get to further subsidize with a tax break on money not actually spent.

That makes sense and is what I assumed, but wanted to get someone else's advice.

NoStacheOhio

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Re: Help with expenses purchased with gift cards...
« Reply #3 on: January 23, 2017, 01:15:57 PM »
I'd recommend maybe saving both receipts and stapling them together. Just in case.