Citibank Tells IRS That Your Frequent-Flier Miles Are Taxable Income

Frequent-flier miles clearly have value–why else would people want them?
But do they also represent taxable income? Citibank seems to think so.

It’s sending tax forms to people who received thousands of miles as a reward for
opening a checking or savings account.

Those forms value each mile at about 2.5 cents and list the total dollar amount as miscellaneous income.

As tax time rolls around, the question of whether airline miles are a form of
income is something that potentially affects millions of people. At the very
least, the tax agency needs to clarify what happens when, as in this case, a
business declares your miles as income paid to you. What happens if you
don’t do likewise?

Story by David Lazarus for the Los Angeles Times

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1 Comment on "Citibank Tells IRS That Your Frequent-Flier Miles Are Taxable Income"

  1. Mary Ellen Pennell | February 13, 2012 at 9:00 am |

    Here is another “scam” going on with credit cards. When the banks were having trouble they lowered the credit limit on my son’s credit card. This resulted in his being over the limit and allowing Chase to charge 21 percent interest. When I called up and complained they took off 2,000 and I paid his credit card off. In January he received a W2 from Chase listing 2,000 as “income” Either way they got their money for scamming.

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