Declaring promotional gifts/items, etc.

[Bioautographica]

What is the name of your state (only U.S. law)? Mississippi

My husband is a self-employed writer (independent contractor) for a large video games entertainment website. Much of his business entails reviewing games, which can run anywhere from $30-60 apiece in retail value. Most of his reviews are of games that the publishers send him (I'm assuming so that he doesn't incur any expense for the purposes of basically *advertising* their games - which, in my opinion, is sort of what reviewing/critiquing is, only there's no guarantee the person will say something positive). In fact, one of the things about which I'm curious is how these companies probably deduct the games they send to reviewers, expense-wise - would they count as advertising expense, and if so, is it just one general expenditure, or do they say, "I sent this title to this person at this address"? As none of them collect information on the reviewer, I can't imagine they'd send my husband anything akin to a 1099-MISC for the property they gave him. We've never been sent anything from these companies for reporting purposes before.

Anyway - my main question is whether or not we have to declare these. We get SEVERAL different games from several different publishers/studios every year. He requires them to do his job, and if they weren't given to him, he'd have to purchase them. Is there a value threshold we'd have to cross first (for instance, if we recieved $100 worth or more in games from one specific developer/publisher)?

 

[Bioautographica]

Bump; I would sincerely appreciate even knowing a good place to start looking for such information, if one doesn't have it off the top of his head.

 

[LdiJ]

Bump; I would sincerely appreciate even knowing a good place to start looking for such information, if one doesn't have it off the top of his head.

To me, that is something that would not be included on your tax return. I doubt that book reviewers, movie critics, or theater critics are required to "purchase" the materials that they review either.

 

[davew128]

Having done the return for a televised restaurant reviewer, I cannot imagine in what context it would possibly be considered income. Its no different in that regard than going to dinner with a business client and the client picks up the tab. From the restaurants perspective the cost is the cost of the food which runs through inventory. From the reviewers perspective the cost is having to eat the food and still have good things to say no matter how bad it is.

 

[tranquility]

And yet, it is an acreation of wealth. While my gut is the same as the others, it's not taxable, I'd want to do some research if the amount was large as there's clearly some transfer of wealth here which is not a gift.

 

[xylene]

If this were to become a problem, one way to handle it would be to return the reviewed games after the 'work' is done.

 

[tranquility]

In the early days of telephonic computer communication was born the bulletin board. A place where people of like mind could join together and talk of things which interested them. Some boards were dedicated to computer gaming. Along with this the desktop publishing revolution happened where anyone with a dollar in their pocket was suddenly a publisher and any fanboy or girl an author. Sometimes they wrote of games. Back in the day, the development cost of games was not akin to the Titanic and the developers felt that if they sold a single game more it was worth it--even if it "cost" them three as there was an industry to develop. (For some reason three sticks in my mind. 1 purchase to 3 gifts.) Smart people saw this and would write a review in a fanzine of gaming and place it on a bulletin board and then would send out notices to all the publishers saying they would be happy to review games.

It worked. For the "cost" of a single article up front, *many* got lots of free software in the publisher's hope of some review which garnered a single sale. It was known by all and articles were written on that and places on these so-called bulletin boards. Many played this as they loved the free stuff they received.

Then this thing called the "internet" grew up and the computers became linked by words rather than numbers. A World Wide Web developed where even those who joined AOL were smart enough to use. A short time thereafter a thing called a blog came about where the author became the publisher and didn't really even need a dollar in their pocket to make it happen. And, the blog was good. While still not at the cost of the Titanic, games were more expensive and the publishers more circumspect in who they would give to. Lo, and the webring developed. A ring of similar interested people who would click on all the places on the ring giving the appearance of many fans of the blog, when in reality, it was the same 10 guys hitting each other's blog using automated software. Still, it worked for a time and the guys got lots of free games.

Today, the Titanic is cheap as to some games and the publishers have real metrics to determine their marketing strategy. Still, the people receiving free things like it.

Now, I may have some passing acquaintance with those prior to today and may have some amount of games in a box(s,s,s,s,s,s,...) in the garage for me to review, but I was just getting stuff for free.

Did you know there are goody bags given out at the Oscars which are worth thousands? Simply having the stars use the items was worth the advertising cost. The stars used to love them, but the nasty old IRS started requiring they pay *taxes* on the FMV of the things they received! Imagine, being treated like the little people.

Still, it was free stuff being given for a business purpose. While I'd work like heck to find a way to explain it to non-taxable as it just seems it shouldn't be, I certainly wouldn't say it's non-taxable until I had researched it as none of that stuff is going back to the publisher (let alone the fair market rental of the playing time).