USA Cost of Goods Sold - Purchasing with rewards points

[Jabbatwenty]

Hi,

I sell via ebay and Amazon and some of the items that we source and sell are from stores that do a rewards points system in which we buy item A at full price (over market price is common) and we get 50% back in points and then use those points to buy item B. When we sell item B say for $150 and paid $150 in rewards points when we bought the item what would be the cost of good sold for tax purposes for item B? Do rewards points redeemed count as a purchase price or is the full $150 taxed?

Thank you,

 

[DTA93433]

In a pasts business I had, we dealt with this issue too.....to make the accounting easy, we decided to book the invoice (when received) for these "rewards points" purchases as capital contributions. Debit inventory....credit capital contributions (to owners).