Since the question is for a separate 3 year warranty, is it considered a prepaid - subject to amortization over 3 years or is it a period expense, since there is no certainty that any claims will ever be made under the warranty? I have found a lot of information about the tax reporting by the issuer of the warranty/service contract, but little guidance on the tax treatment for the buyer. What guidance I have found is pretty much evenly split between a prepaid or a period expense. Don't you love income taxes?
Thanks in advance.
