Many businesses, including both manufacturers and distributors, offer up-front incentive payments to customers in exchange for the customers' commitment to purchase the manufacturer or distributor's products. In a recent private letter ruling (PLR), the IRS concluded that certain types of incentive payments are required to be capitalized while other types of incentive payments may be currently deducted when paid.
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FINANCIAL ADVICE
The Tax Treatment of Incentive Payments to Customers
The Legal Intelligencer
September 14, 2010
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