I bought $20K of Apple products from BB, Staples, etc. to maximize the 10% Discover ApplePay promotion on two cards. I sold everything on eBay before the end of 2015 and now I'm trying to figure out how to handle the cashback bonus on my taxes; some of it arrived before the end of 2015, but most in January. And of course the hope is that the bonus will be doubled next fall on the anniversary of my card opening. From what I've read, cashback should be treated as a rebate that lowers the cost basis of the products I sold (this makes intuitive sense to me, since I only made any profit after the bonus money is figured in).
This was my first year selling on eBay and my first time filing for this business, so I'm trying to decide on an accounting method.
If I go with the accrual method, should I factor in all the cashback tied to the products I sold, including next fall's anticipated double bonus? The concern is that something happens to my account between now and then or Discover doesn't follow through and the bonus doesn't materialize.
If I go cash method, it seems more straightforward; I can record the cashback in the year when/if it arrives as other income.
Am I way off base in how I'm thinking through my options? Any input would be greatly appreciated!