# Dedicated Cell Phone



## Null (Oct 6, 2015)

I'm due for an upgrade and verizon's running a promotion of "Buy one get one free" on Samsung S7s. I would end up with 2 phones. My main personal/rideshare dual purpose phone died and put me out of business (since I can't stand how slow my backup phone is) so I'd like some redundancy going forward. Also, would be nice to leave the phone semi-permanently in the car as I've just about fully automated my mileage tracking. 

I know if you have a dedicated, business only phone, you can write off 100% of the bill attributable to it. 

Would the IRS have any issue with the paid for phone being the one that's assigned to the business and the free one being my personal phone? Or is that sort of creative accounting going to land me in some water in an audit?

The promotion works that I have to ADD a line to be eligible for the BOGO. The line that I'm adding would be the one that's for rideshare purposes only. The freebie phone wouldn't stem from any personal activity and was only available because I added a business line.


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## UberTaxPro (Oct 3, 2014)

Good question! How is the monthly bill itemized? I'd deduct whatever the monthly bill itemizes for the "business phone". Technically, the value of the free phone might be considered income that you should declare. Kinda like a rebate, but it really depends on how the bill is itemized.


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## Null (Oct 6, 2015)

It'd be itemized with the 'line' charge of $20/mo + the value of the device payment plan (about $28/mo) but then sharing the 'pool' of data. 

The free phone works more like a rebate. You have to submit paperwork and you get a gift card for the value of the 2nd phone. So, ultimately the 'freebie' phone won't reflect on the bill at all.


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## UberTaxPro (Oct 3, 2014)

Sounds like you need to separate the business % use out of the 'pool' of data and the value of the gift card should be treated as a rebate.


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## Null (Oct 6, 2015)

UberTaxPro said:


> Sounds like you need to separate the business % use out of the 'pool' of data and the value of the gift card should be treated as a rebate.


IRS seems to imply that rebates aren't taxable as they treat them as buying something at a discount. I suppose if you had a rebate for more than the purchase price that might be different, but getting "1 free" is like getting two at 50% off.


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## UberTaxPro (Oct 3, 2014)

Null said:


> IRS seems to imply that rebates aren't taxable as they treat them as buying something at a discount. I suppose if you had a rebate for more than the purchase price that might be different, but getting "1 free" is like getting two at 50% off.


Cash back or other awards to customers for spending a certain amount of money are not taxable. But gifts, such as an iPad or concert tickets, awarded upfront to get you to open an account for example are taxable. Sounds like your situation is not taxable. The rebate does reduce the basis (cost) of your phones.


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