Rebates and Taxes

[Kyle Meyers]

If I buy something for a property and get a rebate, do I have to reduce the deduction amount by the amount of the rebate? What about reward credit cards, if I get 5% back on purchases, do I have to take that out of the deduction as well?

[Bill Walston]

Kyle, according to IRS PUB 525, a rebate is a reduction of the expense or the basis of an asset. I treat the "rewards cards" in the same way.