Gift Card/Grant ?

[snbauser]

I want to make sure I am accounting for this correctly. I received a gift card from a local agency in return for applying for a certification during a specific time period last year. The gift card was used towards the purchase a new fire extinguisher for my daycare. It did not cover the entire cost. If the local agency sends me a tax form saying they gave me the gift card, I claim it as income and then count the full amount of the fire extinguisher as an expense? If they don't send me a form, do I still count it the same way? Or do I just count the out of pocket portion of the fire extinguisher as an expense?

[TomCopeland]

gift card

I want to make sure I am accounting for this correctly. I received a gift card from a local agency in return for applying for a certification during a specific time period last year. The gift card was used towards the purchase a new fire extinguisher for my daycare. It did not cover the entire cost. If the local agency sends me a tax form saying they gave me the gift card, I claim it as income and then count the full amount of the fire extinguisher as an expense? If they don't send me a form, do I still count it the same way? Or do I just count the out of pocket portion of the fire extinguisher as an expense?

You must report the value of the gift card as taxable income. You can then deduct the full cost of the fire extinguisher (including the amount you paid out of your pocket). This is true whether or not the agency sends you a form.