January 31, 2012
IRS Clarifies Tax Treatment of Frequent Flier Miles
Following up on last week's post, Why Does Citibank, But Not the IRS, Treat Frequent Flyer Miles as Taxable Income?:
- Press Release, Sen. Brown Calls on Citibank to End Deceptive Frequent Flier Tax Practice
- The Hill, Senate Dem Calls Out Citibank on Airline Miles
- L.A. Times, IRS Clarifies its Stand on Whether Airline Miles Are Taxable
- MSNBC, Some Frequent Flier Miles Are Taxable, Citibank Says
- Time, Income Taxes On Frequent Flyer Miles?!
For more, see The Tax Treatment of Frequent Flyer Miles: An Update. (Hat Tip: Alice Abreu, Dave Hoffman.)
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And the really nasty part of the Citibank position is that the miles are worth only 0.6 cents per mile (not 2.5 cents per mile) if a cardholder uses them (as I did recently) to pay his Citibank credit card bill. Is it possible that someone advised Citibank that whatever it reports (in dollars) on Forms 1099 can be deducted on its own 1120?
Posted by: eli bortman | Feb 1, 2012 2:10:00 PM