Amazon bans reviews based on free or discounted products

[meeera]

Originally Posted by DiapDealer

The disclosure [...] was all about individuals being needlessly frightened that the FTC was going to bust their door down if they didn't include it.

I find myself supremely unconcerned about this

[DiapDealer]

Originally Posted by meeera

I find myself supremely unconcerned about this

No doubt!
Even being in the US, I personally wouldn't be concerned with it (as long as I wasn't trying to make money on writing reviews, or accepting ad revenue on a personal website where said reviews are being posted).

[Cinisajoy]

Originally Posted by HarryT

Definitely a good move. We don't allow reviews in exchange for free books at MR precisely because they'll inevitably be biased (has anyone ever seen a bad "honest review I wrote in exchange for a free book"?).

I have written 2 or 3 myself.

[Cinisajoy]

Originally Posted by theducks

I did a review on a $0.00 (first book in a series) just a few days ago. So the Lid is not fully down on e-books.

My 2cents
If you worry about 'Hurting an Author', then the review is not strictly Honest.

There is a difference. If the Goal was to hurt.. Shame!

I mostly pick on flawed editing: wrong words. Runtogeter words

I use the stars for how I liked the story.
My review leans more to the product quality.
But I do point out Quirks as I see them

Not books you bought for free but books that were given to only a select few for review purposes.
Whether you pay $0.00 or $200.00 for an ebook at Amazon, it is a bought book.

[Fiat_Lux]

Originally Posted by DiapDealer

I also don't believe there's an IRS form 1044.

I made a typo. I meant IRS Form 1040.

Amber

[DiapDealer]

Originally Posted by Fiat_Lux

I made a typo. I meant IRS Form 1040.

Amber

That's what I figured. But you still haven't given me any compelling evidence that a hobby reviewer--unpaid (either directly or via ad revenue)--who receives an ARC from an author/publisher would be required to declare said ARC on their 1040 (or how said ARC would even be valuated on their tax return).

[ApK]

Originally Posted by DiapDealer

That's what I figured. But you still haven't given me any compelling evidence that a hobby reviewer--unpaid (either directly or via ad revenue)--who receives an ARC from an author/publisher would be required to declare said ARC on their 1040 (or how said ARC would even be valuated on their tax return).

Based on my exhaustive research of the matter (30 seconds on Google just now) I find these two possibly relevant IRS pages:

Gifts:
https://www.irs.gov/businesses/small...-on-gift-taxes

I can see nothing here that suggests the receiver of a small gift would be required to declare it or pay taxes on it. (Does the publisher have a tax impact from giving away thousands of dollars worth of free books per year? Possibly.)

Barter income:
https://www.irs.gov/taxtopics/tc420.html

(I'm figuring barter might be relevant if this is considered getting paid in books for services as a reviewer.)
Even if this applies, it seems you have to get a lot of free books to reach the level where you'd have to declare them.

So I wonder, too, on what does fiat_lux base the belief that one needs to list an ARC on one's federal income tax return?

[DiapDealer]

Thanks for investigating. I knew about gifting, but I also know that rarely affects the giftee (the gifter is usually responsible for any taxes owed). I'd forgotten about barter, however. Like you, though, I'm not certain that applies here, either.

I figure it's just a case of "bum information" being passed along without any verification. It's not like that never happens.

And if it IS required, then surely there's someone who's sufficiently afraid enough of breaking the law that they DO claim these "free books in exchange for review" and can enlighten us as to how it's done.

[ApK]

I bet a lot of people would be surprised by the barter tax.

They probably think "If I trade a goat for chicken, how could the government collect a tax percentage on that?"

The answer should be obvious: They take an arm and a leg.

<rimshot>

[Blossom]

If you make more than $600 in gift cards you are required to reported it but most don't. Places like Swagbucks do not send out a 1099-C but they are supposed to.

Sent from my XT1528

[DiapDealer]

Originally Posted by Blossom

If you make more than $600 in gift cards you are required to reported it but most don't. Places like Swagbucks do not send out a 1099-C but they are supposed to.

Sent from my XT1528

I don't think there's any threshold or minimum, actually. The relevant tax code is Internal Revenue Code Section 102. 102(c)(1)

Subsection (a) shall not exclude from gross income any amount transferred by or for an employer to, or for the benefit of, an employee.

Exemptions are "de minimis" (benefits are those that are “so small as to make accounting for [them] unreasonable or impractical.) Generally: occasional tickets for entertainment events; [certain] holiday gifts; flowers, fruit, books, etc., provided under special circumstances, etc. section 123(e)

Cash and cash equivalent gifts/prizes (such as gift certificates) cannot be considered de minimis or excluded from income because there is no difficulty in accounting for such prizes.

So I would say you would be required to claim ALL gift cards received from an employer as income. The only thing to be determined is if Swagbucks is your "employer" (quite possible), or if an author/publisher who gives you a free book in exchange for a review is your "employer" (not as likely in my opinion). And even if an author/publisher providing you with a "free book in exchange for an honest review" could be considered ones employer, my interpretation of the tax code is that books would clearly fall under the de minimis exemption and wouldn't need to be declared as income.

[Blossom]

There has been endless debates on the gift cards. Tax preparers are the one that says $600. It's amusing to say the least reading over on Swagbucks Facebook page during tax time. They quote all sorts of tax codes.

These days to make that much on that site is near impossible unless you are gaming the system. I don't do rewards sites anymore. It's just not worth it. The bubble has busted.

Sent from my XT1528

[ApK]

From the IRS Misc. Income info page:

It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income.

The government sites I checked were pretty clear that gift cards, and other non cash items, with a few exceptions, like some low-value length-of-service or retirement awards, all must be reported regardless of value.

There is a threshold (and it may be $600...not sure, seem to recall hearing it was less) below which the payer is not required to send out a 1099, but for stuff below that threshold, the payee is still supposed to report it.

[Blossom]

Agreed but Swagbucks still does not send out a 1099-Misc at any amount was my point.

So it's a based on the honesty scale whether it is reported or not.

Sent from my XT1528

[Fbone]

Originally Posted by ApK

Based on my exhaustive research of the matter (30 seconds on Google just now) I find these two possibly relevant IRS pages:

Gifts:
https://www.irs.gov/businesses/small...-on-gift-taxes

I can see nothing here that suggests the receiver of a small gift would be required to declare it or pay taxes on it. (Does the publisher have a tax impact from giving away thousands of dollars worth of free books per year? Possibly.)

Barter income:
https://www.irs.gov/taxtopics/tc420.html

(I'm figuring barter might be relevant if this is considered getting paid in books for services as a reviewer.)
Even if this applies, it seems you have to get a lot of free books to reach the level where you'd have to declare them.

So I wonder, too, on what does fiat_lux base the belief that one needs to list an ARC on one's federal income tax return?

Yes, barters are taxable. Publication 525, I believe. And both parties are supposed to report "fair market value" on what they received as income. The market value of the book would mostly likely be it's full retail (non-zero) price. The author has to determine what the market value is for a non-professional book review. That could potentially add up if you give out several ARCs.