Page 568 - Large Business IRS Training Guides

Example 4

Gift Cards (cont’d)

• F tracks the sale date and the expiration date

of the gift cards for purposes of its AFS;

therefore, F is able to determine the extent to

which advance payments are included in

revenue for the taxable year of receipt.

• Therefore, F meets the requirement of section

5 of Rev. Proc. 2004-34 and may use the

deferral method under Rev. Proc. 2004-34 for

these advance payments.

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