Amazon Vine

[randellion77]

Another Vine approach:

I own a rental property- 20 acres with cottage.

The Vine items I review are tested at that site:  solar items, batteries, garden care, etc.

I'm thinking the value of the Vine items (say $1000) can be combined with my tenant income.

Then, I can claim the $1000 of Vine items as Expenses to offset the income.

Bottom line, they cancel out within the scope of the Rental Property.

Sound reasonable?

[Bsch4477]

Following 

[randellion77]

Thought I'd follow up with a couple analogies:

Farmer with 20-acre field buys seeds (corn), an expense.

Corn crop on 20 acres yields several bushels of corn in harvest sold at market; the income.

Chrysler operates and maintains a 2000-acre Nevada test track costing $100,000 per month; an expense.

Chrysler tests some new prototypes for GM exclusively for one month.  For $100,000 income.

Vine reviewer subjects garden and camping products to rustic, woodsy conditions in a 20-acre rural setting.  an expense.  

Vine reviewer retains the value of the items tested as compensation; the income.

Somewhat

[randellion77]

Oh, and Chrysler didn't take $100,000 cash, but instead the equivalent value of GM vehicles that were tested on the track (i.e. income). They'll probably take them back to the shop to reverse engineer them.

[mynameismynameandonlymyname]

I am not an accountant, just another Vine user trying to figure the taxes out. I think the problem with your analogies is that you don't have any expenses. The value of the products is a credit, not an expense. Plus you are combining two businesses, Vine with your other business. I think your other business would have to purchase the Vine stuff to make it an expense. Then your Vine business would have double income for the Vine item. Once when received from Amazon and a second time when you sell it to your other business. I am trying to figure out if we can count the product as a loss if we use it for the review and no value is left after the review or it arrives damaged or unusable. I own other businesses too but I would never claim products I get for free as an expense. How is it an expense if you did not pay for it?

[randellion77]

Thanks for the observations!

So, my business, a 20-acre rental property attempts to generate diverse and multiple incomes… rent from a tenant, crops, and energy production.
The crop and energy activities require inputs, tools and materials.  Expenses.  
Fortunately as I actively manage the property and procure tools and materials, Vine is available as a source.  Under the umbrella of the rental business I review items essential to the operation of the rental and obtain product value (income).
It just so happens these products remain integrated and expended into the employ of the rental property, as opposed to using elsewhere or selling later on.
Bottom line expenses cancel income.

[Bsch4477]

What was the expense? You didn’t pay for the Vine stuff. 

[randellion77]

I did pay for the Vine items with my reviewing brainpower, time, and effort.  That has value, and that value was spent (expense) to earn the Vine items.

[randellion77]

I need some fencing to protect my commercial garden plants from being eaten by deer.

Objective: obtain fencing for my garden.

Scenario A: I could go to work as a reviewer for Consumer Reports and earn $100.

I could then go to Home Depot and buy $100 of fencing and install around my commercial garden.

Labor earns $100 income, fence installed at garden; expense $100.  Objective met.

Scenario B: I could review Vine fencing and earn $100 of fencing (per 1099-NEC).

I then install the $100 value fencing at garden; expense $100.  Objective met.

[Bsch4477]

The fallacy in your reasoning is that your labor is not deductible.  If you hired someone for $100 to install the fence and the materials received from Amazon were valued at $100 you would report the Amazon income and deduct the $100 cost of labor that you paid for. A wash. But your labor is not deductible. 

[mynameismynameandonlymyname]

Exactly! I agree with you! He could maybe start another business that is separate and then install the fence and then bill his farm business the $100. Not sure that would pass audit if he is not also doing jobs off the farm doing similar work for hire. I am all for trying to figure out legal ways to offset the taxes if we claim it as a business and not a hobby.. There is a lot of mental gymnastics going on above in the scenarios as stated.  

[randellion77]

I am not deducting the labor as an expense.

I'm deducting the value of the Vine items employed by the Rental Enterprise.

I assume that an expense does not necessarily need to be denominated in money; that an expense can be in the form of a tangible item.

[Bsch4477]

You can’t deduct an item that you didn’t pay for. 

[mynameismynameandonlymyname]

That is not how the IRS is going to see it. If you make $100 income and then go spend that $100 on something then the expense of buying that item might be tax deductible if it meets certain requirements. It is not always 100%. Some items you can only claim a certain % and some depreciate over time so you claim part each year for so many years. So I can see you reasoning that if the item was used in the business then you should be able to claim it as an expense like if you bought it. It just don't think it works that way in the eyes if the IRS. 

[randellion77]

paid with labor