Re: Is rakeback income?
When you receive a rebate on a purchase like a vehicle, you reduce your basis by the amount of the rebate. If you buy a new car for $10,000 and receive a rebate of $500, your basis is $9,500. It is the basis from which you calculate gain/loss should you sell the car or need to figure depreciation if you use it for your business. So you're not counting the rebate as income, thus you're not paying tax on it. So goodgrief is right.
IRS Publication 525 states that "if the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income." That is similar to reducing the basis as described above.
When you file, you can deduct your gambling losses to the extent of your gambling winnings. (These are two separate numbers. This is not one net number.) So, the rake you get back reduces the basis of your winnings. Subtract the rake from your winnings and procede. (Claw eyeballs out at this step if necessary.)
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