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Interest Expense deduction on Rewards Network advances
Have a client that took cash advances of $22,100 from "Rewards Network" in 2011. They are on the hook for $44,000 however for that $22,100. They pay back over time when members use their credit card at their restaurant. In effect there is $21,900 in interest cost.
In 2011 they paid back $25,332.46 from credit card charges (80% of $31,665 worth of credit card charges) that Rewards Network takes from their bank account. How and when should I take this deduction? Anyone have experience with this situation??
Rick
Have a client that took cash advances of $22,100 from "Rewards Network" in 2011. They are on the hook for $44,000 however for that $22,100. They pay back over time when members use their credit card at their restaurant. In effect there is $21,900 in interest cost.
In 2011 they paid back $25,332.46 from credit card charges (80% of $31,665 worth of credit card charges) that Rewards Network takes from their bank account. How and when should I take this deduction? Anyone have experience with this situation??
Rick
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