Taxation of Frequent Flyer Miles

A benefit has only lately received attention after flying under the radar for many years: tax-free receipt of frequent flyer miles.
Earlier this year, several news outlets reported that Citibank surprised many of its customers by issuing Forms 1099-MISC, Miscellaneous Income, to report the value of frequent flyer miles the customers had received in exchange for opening new accounts as part of an ongoing promotion. Understandably, the customers were upset because, the value of the miles notwithstanding, many of them ended up paying dearly (through potentially as much as several hundred dollars in taxes) merely for opening an account.

Read More » [aicpa]

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