Someone asked: "are discounts to Piano Dealers deductible? conceivably they might be considered referal fees because they allow access to the piano service market. " They certainly have the net effect of referral fees. Say for example, if your normal price is $75. You pay a referral fee to someone of $10 for the tuning. You book both the $75 revenue for the tuning, and the expense of the $10 referral fee, for a net of $65 income for that transaction. Say you negotiate $65 fee with a piano dealer. You could either just book the $65 straight, or book the normal $75, then show a discount of $10, still showing the same net of $65. The discount would be treated as a reduction of revenue on your Schedule C, just like an expense. I could make a strong argument that on your invoice to the piano dealer you would want to show the whole price of $75, and the discount of $10, totalling down to the net of $65. That way every time he sees your invoice he has a reminder that you are cutting him a deal. (Hopefully in exchange for continued steady business and additional referrals). Arlin
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