Gift Card & Deduction

[legomom922]

I recieved a JC Penny gift card from my Mom for $50. I bought a new Butcher Block Knife Set with it. So can I still take the t/s deduction for this item? I'm looking at it like my mom gave me $50 cash, and then I would still be able to write this off. Am I correct in my thinking?

[Michael]

I can't remember the thread but I believe Tom Copeland said you can't because the money was a gift.

[legomom922]

Originally Posted by Michael

I can't remember the thread but I believe Tom Copeland said you can't because the money was a gift.

Took me awhile to locate the thread, but I found this so I guess my question is answered:


10-01-2010, 02:54 PM
TomCopeland
Business Author/Trainer Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 571

Gift cards

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Here's the deal:
If you get a gift card from a friend (that is, someone who is giving you a gift as a friend, not because of a business relationship) then the gift card is not income. It sounds like this baby shower was a gathering of "friends", not a gathering of day care parents.

If you get a gift card from a day care parent, this should be reported as income. Any cash or gift cards from day care parents, even if they call it a "gift" is reportable income. This is because you are receiving this as a result of your business relationship. However, if you receive a thing (book, scarf, flowers, etc.) from a day care parent then this would be called a gift and is not income.

No matter who you get the gift card from, if you spend the gift card on something that is used in your business you can deduct it under the normal rules of business deductions.


So under this rule, if I understand this correctly, because the gift card was given to me by someone other than a DC parent, and the item I'm purchasing will be used in DC, I can write off the business %.

[TomCopeland]

Originally Posted by legomom922

Took me awhile to locate the thread, but I found this so I guess my question is answered:


10-01-2010, 02:54 PM
TomCopeland
Business Author/Trainer Join Date: Jun 2010
Location: St. Paul, Minnesota
Posts: 571

Gift cards

--------------------------------------------------------------------------------

Here's the deal:
If you get a gift card from a friend (that is, someone who is giving you a gift as a friend, not because of a business relationship) then the gift card is not income. It sounds like this baby shower was a gathering of "friends", not a gathering of day care parents.

If you get a gift card from a day care parent, this should be reported as income. Any cash or gift cards from day care parents, even if they call it a "gift" is reportable income. This is because you are receiving this as a result of your business relationship. However, if you receive a thing (book, scarf, flowers, etc.) from a day care parent then this would be called a gift and is not income.

No matter who you get the gift card from, if you spend the gift card on something that is used in your business you can deduct it under the normal rules of business deductions.


So under this rule, if I understand this correctly, because the gift card was given to me by someone other than a DC parent, and the item I'm purchasing will be used in DC, I can write off the business %.

Yes, you can deduct the items your purchase for your business.