Deductibility of referral fees, etc.

[David Love]

..with a taxable remainder of $65.00... I meant to say

David Love
davidlovepianos@earthlink.net


> [Original Message]
> From: David Love <davidlovepianos@earthlink.net>
> To: Pianotech <pianotech@ptg.org>
> Date: 1/30/2004 5:59:05 PM
> Subject: RE: Deductibility of referral fees, etc.
>
> It's not quite the same thing.  However you book it, your income is based
> on money actually received and you would be deducting $10.00 from $65.00
> worth of income paying taxes then on $55.00.  In the referral fee
scenario,
> you receive $75.00 and you pay out $10.00 with a taxable remainder of
> $75.00.  Of course, you could always deposit the money in an offshore
bank.
> Or just pretend you did, like those great guys over at Enron.     
>
> David Love
> davidlovepianos@earthlink.net
>
>
> > [Original Message]
> > From: Arlin Hall <ahall12@austin.rr.com>
> > To: <pianotech@ptg.org>
> > Date: 1/30/2004 5:45:58 PM
> > Subject: Deductibility of referral fees, etc.
> >
> > 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
> >
> > _______________________________________________
> > pianotech list info: https://www.moypiano.com/resources/#archives
>
>
>
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