I realize that this is an older message but thought I'd add a few points to clarify the question because so many of us who are Amazon Vine reviewers are also in tax limbo.
Some important considerations about the program:
The vine program is not a barter or compensation for a service. Per Amazon's Vine TOS: "Products are promotional offers to you and are not sold to you".
We are not being given a product (compensation) in exchange for a review (service). We are not required to review the products that we choose. Per the TOS, we are required to review at least 50% of the products we choose IF we want to continue receiving promotional products in the future. But, we could receive 100s of promotional products over a 6 month period and never leave a review (which would result in termination of participation).
Per Amazon: "title of Vine items transfers to you at the time of delivery to you". We are allowed to keep or destroy the items we receive. However, we can not transfer or sell the items we receive for 6 months.
To review any of the products we receive, we either consume them (urinalysis test strips, food, health care items, pet potty pads) or render them used (bed sheets, replacement parts, clothing, etc). So essentially, after we comply with the TOS for our business or hobby, we are left with used or depleted products which can not be sold for 6 months (if at all).
If this is a hobby, we still only end up with used products once the reviews are completed for the hobby.
If this is a business, how do we expense the sale of used products after the required 6 months, or expense those items that were consumed primarily for reviews and no longer exist for resale?
An additional problem is Amazon's Estimate Tax Value of items (they use the seller's listed price not including discounts the seller offers the public). Per the IRS "FMV is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts".
Vine products are typically priced higher than competitor products (presumably so that the seller can take a bigger tax cut while it's a available as promotional product on Vine). So typically, the FMV value that Amazon reports on the 1099 is 20-30% higher than if we had just purchased the item outright through Amazon or any other competitor's website.
Any filing clarification or guidance would be greatly appreciated (by thousands of Vine participants)
Thanks in advance!
