Is Apple App Store's Sales Commission a Tax Dectuc...
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Javafuel
Level 1

Is Apple App Store's Sales Commission a Tax Dectuctable?

Hi,

Apple App Store charges 30% commission for every transactions from the store. Can that 30% commission be claimed as a detectable?

 

For example, I'm selling 10 apps in Apple App Store and each app is listed for $1.00. After Apple App Store's commission, Apple pays me $0.70 for every app sold.

 

In 2020, I sold 100,000 apps and received $70,000 from Apple.  When I file Business Income in Turbo Tax, do I report:

A. The actual amount that Apple paid me ($70,000)  without claiming Apple Store's 30% commission as a deduction? 

B. The $100,000 and $30,000 deduction as commission?

C. $70,000 and 30,000 deduction?

 

Thanks,

 

3 Replies
MaryK1101
Expert Alumni

Is Apple App Store's Sales Commission a Tax Dectuctable?

You will enter the total income $100,000 then deduct the fees $30,000.

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Javafuel
Level 1

Is Apple App Store's Sales Commission a Tax Dectuctable?

Can I just report the actual payment of $70,000 from Apple without claiming the $30,000 as a deduction? Because financial report issued by the App Store is a global one, it lists sales revenues from each country and in its native currency without a summary in USD. In order to figure out the exact amount of commission, I would have to convert each country's currency to USD and there is a lot of countries to convert.

 

 

MaryK1101
Expert Alumni

Is Apple App Store's Sales Commission a Tax Dectuctable?

Yes, you would be able to use the "constructive receipt"- you never had the right or control of the fees. 

 

Under the cash method, include in your gross income all items of income you actually or constructively receive during your tax year. If you receive property or services, you must include their fair market value in income.  You have constructive receipt of income when an amount is credited to your account or made available to you without restriction. You do not need to have possession of it. If you authorize someone to be your agent and receive income for you, you are treated as having received it when your agent received it. (Constructive receipt.)

 

@Javafuel

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