Frequent Flyer miles taxable? Maybe, in the US

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Interesting, I've always been under the impression that points mever had a set value for exactly the point of stopping the tax man from looking at them.

I'm sure that if the IRS does treat them as taxable income, then some smartarse lawyer / accountant will find a loophole which thus makes status runs / mileage runs fully paid for by tax and a loss which can be offset against other income...
 
I reckon Citi has found a way of deducting the tax at source and then charging a fee to the tax office for collecting it.
 
I reckon Citibank has also found a way of losing customers! (there is not much detail in the report, but TBH, if Citibank do it and no-one else does, I'd be pretty pi55ed off if I was a Citibank customer, and be looking to take my business elsewhere. Would be nice to know more about this).
 
I think this is very similar to the Amazon situation. Hey, guess what mr tax man. We don't think our product should attract a tax. But if it must, we are going to charge you for collecting it.

I think if Citi have announced this to the general public then they either have info we don't have or they are just trying to be ahead of the bunch.
 
TBH, I can't see this ever happening in Australia. We're trying to simplify our tax system and get a whole heap of low-tax-liability people out of the system altogether. Not create more work for the ATO. It would cost more to analyse and process than would be collected..

However, if it was to ever occur, at least we have this to look forward to:
...some smartarse lawyer / accountant will find a loophole which thus makes status runs / mileage runs fully paid for by tax and a loss which can be offset against other income...




Sent from my iPhone using Aust Freq Fly app
 
Currently FF points are not taxable in Australia.
Now there is a double tax agreement between Australia and the US.
Lets say you earn 100,000 points a year on the US system with Citi and others like AMEX the US Tax Man may assess this as say $1,000 of income.
When this income becomes part of an Australian residents tax return back in OZ it is likely to be considered as exempt from tax under our system but I am not certain about it.
Qantas tends to limit the release of FF points to 250,000 per person per year out of their systems at the request of the ATO( to avoid commercial rorting I would be thinking).
 
If that's the case, then activities related to generating the income would also be tax deductible - i.e. the entire credit card bill.
 
If miles became taxable here, you can be certain that I will also be claiming a deduction when those points are used for business travel.
 
If miles became taxable here, you can be certain that I will also be claiming a deduction when those points are used for business travel.

All of a sudden all my travel would become business travel!
.


If it doesn't matter if you win or lose.......How come they keep score?
 
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