Re: Is Rakeback Taxable?
Please read and search for my posts on the subject. There is no justification that would hold up to IRS scrutiny to exclude this income.
Rakeback is a return of an expense that has been deducted from your income. The refund of a deducted item is always taxable, unless you receive no tax benefit from the deduction of that expense.
The IRS code is not an all-inclusive text. Your CPA will not find anything definite on the subject that will state rakeback is taxable or nontaxable. The only thing that will be found is that all income is taxable unless specifically excluded. Rakeback (or anything similar) is not excludable.
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