[Ryan Shiroky]

Can merchants write off the delta on both MCA and loan product or just loan products?

[Chambo]

Unless you have a CPA license, I would stay out of the tax business. you can suggest, but you would be MUCH BETTER served if you deferred to THEIR tax professional.

Lest you give faulty advice and the lawyers come a searchin' for your behind

[Ryan Shiroky]

I ALWAYS tell them "I am NOT a CPA and you should consult your accountant about this, BUT, alot of merchants use the cost of capital of these products as a tax write off"... I clarified with accounting in my office though, they can write them both off (the delta that is...).

[MCNetwork]

You can write off the interest on an ACH loan product. You can't write off the cost of funds on the credit card advance because this is a purchase of future receivables, and not technically interest.

[Sean Cash]

Since you're selling future revenues at a loss, maybe you can write off the loss?

[mfs01]

From my understanding, I believe that you can write off the the cost (100k at 1.3 = 130k, so you can write off $30k)

[Chambo]

Since you're selling future revenues at a loss, maybe you can write off the loss?

That is my understanding, but again, unless you have a CPA certificate, I would not go out stating these issues as fact and leaving yourself exposed.

[AndyYSCISOdept]

Does that also go for defaults etc? Or is that a whole other ball of wax?

[MCNetwork]

Defaults would be deducted from gross revenue to arrive at net income for tax purposes.

[AndyYSCISOdept]

Thanks for the info, much appreciated.

[MCNetwork]

Anytime Andy!

[Chambo]

Does that also go for defaults etc? Or is that a whole other ball of wax?

Andy, receivables on defaults are a whole different ball game.

This post is for the merchant however

[Ryan Shiroky]

From my understanding, I believe that you can write off the the cost (100k at 1.3 = 130k, so you can write off $30k)

Yes, to my knowledge this is what is done, the delta is written off....

[markcrane]

mcas are not tax deductable as they arent considered a loan. being that an ach product is a loan, the interest can be.

[Ryan Shiroky]

mcas are not tax deductable as they arent considered a loan. being that an ach product is a loan, the interest can be.

Right, but it can be considered a business expense...

Good to see you here Crane... I'll hit you up later today, have to talk to you...

[Capital Stack]

Many ACH products out there are structured as MCA's future receivables sales.

mcas are not tax deductable as they arent considered a loan. being that an ach product is a loan, the interest can be.

[markcrane]

yes and no, but the repayment isnt. the irs will want to see collection efforts and will not consider anything done through processing a business loan.