ABC News- Channel 7 NYC- Taxing Your Miles

ABC News just had a short report on the 11:00 news regarding taxing airline miles.

I watched the report a couple of times and jotted down what the reporter said.
Here it is:
“All of those incentives offering free airline miles may not be so free after all. Free miles could cost you like when you open a bank account and get free miles. The IRS now says those miles are considered taxable. However the taxable rule does not apply to free miles you earn either from flying or buying merchandise.”

I know this is being talked about quite a bit and I am not looking to get too deep into this discussion. I just don’t get how we could get taxed on miles which we do not officially own. The miles have no set monetary value. The value is all relative to what they are used for. Some might use it for a flight, others for gift cards or other items from a shopping portal.
Hopefully this does not really affect us and bring down the value of our hard earned miles…

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