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#375334 - 06/20/05 08:43 PM Free Goods.
complianceman Offline
Platinum Poster
complianceman
Joined: Mar 2005
Posts: 687
New Albany, IN
Here is a scenario that I need help with. If your marketing department wishes to advertise that for each new account, the account holder would receive two free passes aboard a local dinner cruise vessel. The vouchers are being "donated" by the dinner cruise vessel for us mentioning them in the advertisement. Additionally, the dinner cruise vessel is a customer of the financial institutions. Since the vouchers are being "donated", is a 1099 required eventhough the vouchers are valued at more than $10.00?

Any assistance would be greatly appreciated.
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Marketing
#375335 - 06/21/05 01:26 PM Re: Free Goods.
ahou Offline
Power Poster
ahou
Joined: Aug 2002
Posts: 3,094
I believe the IRS considers this a premium, because it is given in connection with opening an account.
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#375336 - 06/21/05 09:07 PM Re: Free Goods.
complianceman Offline
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complianceman
Joined: Mar 2005
Posts: 687
New Albany, IN
Can you provide me with IRS Code reference?

Thanks
_________________________
The opinion stated here is what it is, My Opinion.

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#375337 - 06/21/05 09:17 PM Re: Free Goods.
ahou Offline
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ahou
Joined: Aug 2002
Posts: 3,094
Rev. Proc 200-30 defines "interest" (premiums)
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Opinions are my own and not of my employer.

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#375338 - 06/22/05 02:26 AM Re: Free Goods.
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
Rev. Proc. 2000-30 states: "The cost to the financial institution of the premium is used in determining whether the dollar limitations are met."

Since there is no cost to the financial institution, I do not believe reporting would be triggered.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#375339 - 06/23/05 02:50 AM Re: Free Goods.
complianceman Offline
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complianceman
Joined: Mar 2005
Posts: 687
New Albany, IN
Sounds good to me. Thanks rlcarey.
_________________________
The opinion stated here is what it is, My Opinion.

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