Citibank 1099

[MarkS]

I think all income goes between line 7 and 21, so it needs to go there i think.

You are correct.
I'm thinking that since this won't be on a Schedule C, maybe it does belong on line 21.
Typically a 1099-misc needs a Schedule C and SE so it ends up on line 12 of 1040.

Because this doesn't need a C, maybe it does end up on 21.

The remaining question is will Turbo Tax etc. let you put it there without counting it as earned income and messing up your EIC calculation?

[Deal Guy]

http://www.forbes.com/sites/baldwin/2012/02/03/new-taxation-of-frequent-flier-miles/

[azhoopsfan]

This is concerning for those with Bank Direct accounts. 

[HelpMe]

http://www.forbes.com/sites/baldwin/2012/02/03/new-taxation-of-frequent-flier-miles/

I would like to see this law.

"There’s a specific tax law forbidding the IRS to tax miles handed out the usual way, as a reward for travel."

[MLM]

Will the Citibank 1099 ruin my EIC eligibility?

[yitzf]

Will the Citibank 1099 ruin my EIC eligibility?

Investment income must be $3,200 or less for the year.
http://www.irs.gov/individuals/article/0,,id=233839,00.html

[MarkS]

I would like to see this law.

"There’s a specific tax law forbidding the IRS to tax miles handed out the usual way, as a reward for travel."

It's in IRS Announcement 2002-18

[HelpMe]

It's in IRS Announcement 2002-18

Wasn't that for as it relates to business travel?

[azhoopsfan]

Wasn't that for as it relates to business travel?

And it's not a law, it's the IRS's position at it can change whenever they want it to. 

[HelpMe]

What members should also be concerned with is if they sell their miles.

[MarkS]

Investment News Arcticle

You are right that the Announcement is referring to miles earned on Business travel and not soo applicable here. See the Investment news article for more info..

[azhoopsfan]

What members should also be concerned with is if they sell their miles.

That's always been the case.  If you don't pay tax on them when you receive them, your basis is zero and thus entirely taxable. 

[HelpMe]

Investment News Arcticle

You are right that the Announcement is referring to miles earned on Business travel and not soo applicable here. See the Investment news article for more info..

Direct link or do I have to register?

[HelpMe]

That's always been the case.  If you don't pay tax on them when you receive them, your basis is zero and thus entirely taxable.

I wonder how many members know that?

[MarkS]

Direct link or do I have to register?

Click here, and select the first result

[HelpMe]

Click here, and select the first result

Thanks. I wonder why they are making a big deal out of it now. This is not the first year Citi has done this.

[fred]

Investment income must be $3,200 or less for the year.
http://www.irs.gov/individuals/article/0,,id=233839,00.html

citi sends a 1099-misc. NOT a 1099-INT
according to my accountant that does not have to be reported as unearned income. (the 1099-int is what banks send for interest)
That means it does not have an affect on your EIC.

[fred]

Will the Citibank 1099 ruin my EIC eligibility?

it should not. It is a 1099-misc not 1099-int so it does not have to be reported as UNEARNED income. If done properly, it should not affect your EIC. Choose your accountant wisely as always.

[HelpMe]

citi sends a 1099-misc. NOT a 1099-INT
according to my accountant that does not have to be reported as unearned income. (the 1099-int is what banks send for interest)
That means it does not have an affect on your EIC.

Where do you report it?

[Deal Guy]

it should not. It is a 1099-misc not 1099-int so it does not have to be reported as UNEARNED income. If done properly, it should not affect your EIC. Choose your accountant wisely as always.

If it doesnt have to be reported as unearned income, than what type of income is it?