Are bonus and rebate taxable?
Suppose
I purchase something from a company, and I get some rebate.
I open an account with a bank, and I get some bonus.
Questions (for The United States)
To me, are rebate and bonus taxable income when I report my personal income tax
in 1040 form?
To the company, is the rebate excluded when calculating its taxable
income?
To the bank, is the bonus excluded when calculating its taxable
income?
Thanks and regards!
(1)1 Comments
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The classic case of getting a toaster from the bank is treated as interest. So it will be taxable income for the customer.
For the rebate, or for that matter a coupon, it is not a taxable event for the customer. They are just a complicated sale.
For the bank, the toaster is interest they are paying.
For the company I am not sure if the rebate reduces their income, or increases their expenses.
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