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Returning Member
posted May 14, 2020 7:00:40 PM

I used ebates (rakuten) to earn cashback on a business purchase. Do I report that as income?

Scenario one: I used ebates (now called rakuten.ca ) to buy equipment for my business. The equipment is substantial enough to go under a CCA category. The ebates rebate accounts for about 12% of the total cost of that equipment. 

 

Where does the ebates (rakuten.ca) rebate payment go? Is it "other income"? Or is the cost of equipment adjusted to reflect what I got after the rebate?

 

Note: this is not really a discount, or is it?  The product receipt is the full, retail price amount. The ebates (rakuten) rebate comes after 3 months via Paypal. 

 

Scenario two: I use ebates to buy supplies and minor equipment for my business. It's not enough to count as CCA (under $200). Where does the cash back from the ebates purchase go? Income? Or adjust the cost of the equipment and supplies?

 

Scenario three: I buy something via ebates (rakuten) and use it partially for my business. How is the product expense calculated? As just the portion I want to claim for business use? Or the whole amount? And then the ebates (rakuten) cashback scenario - is only that same percentage portion claimed as income? Or is all of it claimed as income?

 

Speaking of Turbo Tax Online, and being self employed as a freelancer, sole proprietor.

 

 

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1 Replies
Moderator
Jan 15, 2023 4:35:45 PM

Generally, cash back and similar rewards are not taxable, unless you earned them on business purchases, but then redeemed them for actual cash.