Author Topic: any accountants out there that i can ask a question?  (Read 490534 times)

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #680 on: January 18, 2016, 01:21:30 PM »
so who is reporting their sale of miles/points as income on their tax return?
if yes, as what?

maybe this should be a new thread?
Pretty sure there is a thread or five

Offline Dawie

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Re: any accountants out there that i can ask a question?
« Reply #681 on: January 18, 2016, 04:02:40 PM »
Pretty sure there is a thread or five
as of now unless you are in the business of buying and selling miles you dont have to report it as it's treated as a rebate
the same way you dont report the $50 gift card you get when you buy a new oven

Offline churnbabychurn

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Re: any accountants out there that i can ask a question?
« Reply #682 on: January 18, 2016, 04:51:02 PM »
as of now unless you are in the business of buying and selling miles you dont have to report it as it's treated as a rebate
the same way you dont report the $50 gift card you get when you buy a new oven
You mean that if I sell 500k MR to a broker that's a rebate? ?

Offline lunatic

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Re: any accountants out there that i can ask a question?
« Reply #683 on: January 18, 2016, 04:52:12 PM »
as of now unless you are in the business of buying and selling miles you dont have to report it as it's treated as a rebate
the same way you dont report the $50 gift card you get when you buy a new oven
If it is a rebate,  doesn't that reduce your basis?  And then you have income

Offline Dawie

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Re: any accountants out there that i can ask a question?
« Reply #684 on: January 18, 2016, 04:53:52 PM »
You mean that if I sell 500k MR to a broker that's a rebate? ?
so far
https://www.irs.gov/pub/irs-drop/a-02-18.pdf
now if they see that you earned it by MS or something they could tayna it's a business or not covered under their notice

Offline Dawie

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Re: any accountants out there that i can ask a question?
« Reply #685 on: January 18, 2016, 04:54:45 PM »
If it is a rebate,  doesn't that reduce your basis?  And then you have income
if you buy something for the business on a personal CC  and then using the miles yourself they are looking the other way

Offline MarkS

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Re: any accountants out there that i can ask a question?
« Reply #686 on: January 18, 2016, 04:56:15 PM »
so far
https://www.irs.gov/pub/irs-drop/a-02-18.pdf
now if they see that you earned it by MS or something they could tayna it's a business or not covered under their notice
And signup bonuses?
It's already been discussed, that this letter specifically addresses whether or not earning the miles is a taxable event.

The publication specifically says: This relief does not apply to travel or other promotional benefits that are
converted to cash, to compensation that is paid in the form of travel or other
promotional benefits, or in other circumstances where these benefits are used for
tax avoidance purposes.   

Offline Dawie

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Re: any accountants out there that i can ask a question?
« Reply #687 on: January 18, 2016, 04:57:17 PM »
if you buy something for the business on a personal CC  and then using the miles yourself they are looking the other way
this guy is cholek on me http://money.usnews.com/money/blogs/my-money/2013/02/04/are-credit-card-cashback-rewards-and-airline-miles-taxable

Offline Dawie

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Re: any accountants out there that i can ask a question?
« Reply #688 on: January 18, 2016, 05:00:57 PM »
And signup bonuses?
It's already been discussed, that this letter specifically addresses whether or not earning the miles is a taxable event.

The publication specifically says: This relief does not apply to travel or other promotional benefits that are
converted to cash, to compensation that is paid in the form of travel or other
promotional benefits, or in other circumstances where these benefits are used for
tax avoidance purposes.   

Sign up bonuses are covered under the citibank ruling in 2012 http://www.forbes.com/sites/kellyphillipserb/2014/08/28/tax-court-sides-with-irs-in-tax-treatment-of-frequent-flyer-miles-issued-by-citibank/#2715e4857a0b35cfe4095ce5 they were the idiots for issuing a 1099
The svara is that the signup  bonus in the form of miles is a prepaid rebate ? and doesn;t have a stated value (never stopped the IRS or banks before from issuing a totally crazy one)

Offline dovy2

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Re: any accountants out there that i can ask a question?
« Reply #689 on: January 18, 2016, 05:42:24 PM »
Sign up bonuses are covered under the citibank ruling in 2012 http://www.forbes.com/sites/kellyphillipserb/2014/08/28/tax-court-sides-with-irs-in-tax-treatment-of-frequent-flyer-miles-issued-by-citibank/#2715e4857a0b35cfe4095ce5 they were the idiots for issuing a 1099
The svara is that the signup  bonus in the form of miles is a prepaid rebate ? and doesn;t have a stated value (never stopped the IRS or banks before from issuing a totally crazy one)
didn't grasp the maskana. Do I need to report my sale of over 500k amex points (mainly signup bonuses) or not?

Offline Dawie

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Re: any accountants out there that i can ask a question?
« Reply #690 on: January 18, 2016, 05:53:10 PM »
didn't grasp the maskana. Do I need to report my sale of over 500k amex points (mainly signup bonuses) or not?
Lfi Aniyas Daati, no, but only if 3 other LOA's agree with my psak
#AYLOA

Offline MarkS

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Re: any accountants out there that i can ask a question?
« Reply #691 on: January 18, 2016, 05:54:08 PM »
Lfi Aniyas Daati, no, but only if 3 other LOA's agree with my psak
#AYLOA
If I own something and I sell it for $$, why shouldn't I pay taxes on it? The question could be what my basis is and if I earned a specific basis by receiving it then I'd need to calculate my gain on sale. But why would I flat out not have to pay taxes when selling something for a profit?

Offline dovy2

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Re: any accountants out there that i can ask a question?
« Reply #692 on: January 18, 2016, 06:17:33 PM »
Here's my thoughts on my question I asked above,

 on one hand it's a profit so it should be reported.

On the other hand, since the IRS ruled that they are considered a rebate, as technically I could have used them as a payment towards my statement.
So it's considered cash. If I sold cash to someone, I shouldn't have to report that.
Am I wrong ?

Maybe, I only have to report the difference in price from the one cent each value to what I actually sold it for.

Thoughts?

Offline lunatic

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Re: any accountants out there that i can ask a question?
« Reply #693 on: January 18, 2016, 06:33:25 PM »
We have to differentiate between miles earned and used (clearly not taxable)  and the subsequent sale of such.  Once you sell and get cash,  you are in a different world.  I can't see how such is not taxable. Perhaps one could argue it's capital gains or such,  but  how can you say it's not taxable at all

Offline MarkS

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Re: any accountants out there that i can ask a question?
« Reply #694 on: January 18, 2016, 06:38:03 PM »
We have to differentiate between miles earned and used (clearly not taxable)  and the subsequent sale of such.  Once you sell and get cash,  you are in a different world.  I can't see how such is not taxable. Perhaps one could argue it's capital gains or such,  but  how can you say it's not taxable at all
Correct. ,The only way it's not taxable is if your basis in the points is equal to or above selling price. So say you sell the points 100K @ 1.5 and get $1,500. According to the rebate theory, you can possibly say that by spending $10K on my Amex Plat I got a sign up bonus of 100K and it's really a rebate. According to the company that rebate may be worth well above 1.5cpm. So in that case you may have a basis above what you received and you really had a loss by selling for $1,500.

Or do you say that since you got it for free your basis is zero (but thenin that case receiving it should be taxable).

So the rebate explanation MAY give you a high basis.

Offline lunatic

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Re: any accountants out there that i can ask a question?
« Reply #695 on: January 18, 2016, 06:44:56 PM »
You can't have it both ways.  If you have basis,  it's taxable when you receive the points

Offline dovy2

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Re: any accountants out there that i can ask a question?
« Reply #696 on: January 18, 2016, 06:47:58 PM »
We have to differentiate between miles earned and used (clearly not taxable)  and the subsequent sale of such.  Once you sell and get cash,  you are in a different world.  I can't see how such is not taxable. Perhaps one could argue it's capital gains or such,  but  how can you say it's not taxable at all
of I received a staples rebate in form of a $100 visa gift card and I sell it for $120, how much would I need to report? All of it, nothing, or $20?

Offline lunatic

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Re: any accountants out there that i can ask a question?
« Reply #697 on: January 18, 2016, 06:52:00 PM »
of I received a staples rebate in form of a $100 visa gift card and I sell it for $120, how much would I need to report? All of it, nothing, or $20?
20. But the other 100 would be another issue.  If you kept the original item,  you purchased it for 100 less.  But if you sold the original item,  it's another 100 profit

Offline Zevi16

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Re: any accountants out there that i can ask a question?
« Reply #698 on: January 24, 2016, 06:30:19 PM »
If I have a rental agency business. It focuses on renting out people's apartments that live in Israel to renters that usually live in America. We take commission from both parties. Could I just make it legal in USA and pay taxes in USA,  or must it be legal as well under Israeli laws?
Another question, is there any specific licence needed in America for this kind of job like regular real estate? All I am is an agent /shadchan.
Thanx

Offline CS91

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Re: any accountants out there that i can ask a question?
« Reply #699 on: February 02, 2016, 02:39:00 PM »
If I was a PA resident for the entire 2015 but I worked in NY, do I need to file a NY State return too, or just PA?