Author Topic: FBI Raids Orthodox Homes  (Read 234990 times)

Offline ChaimMoskowitz

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Re: FBI Raids Orthodox Homes
« Reply #1040 on: July 07, 2017, 01:41:25 PM »
In your second example, you have a $100 basis that needs to be allocated between the item acquired and the miles received. How much to allocate to the miles is subject to debate. Once you have allocated the $100 accordingly, you have no taxable income unless you sell the item or miles ands the amount received exceeds the allocated basis.
Not so fast there Skippy.  :)
What if the IRS takes the position the miles have no value and everything you sell them for is taxable?
I just found a new supply of forks!

Offline churnbabychurn

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Re: FBI Raids Orthodox Homes
« Reply #1041 on: July 07, 2017, 01:52:50 PM »
Not so fast there Skippy.  :)
What if the IRS takes the position the miles have no value and everything you sell them for is taxable?
If these miles are a gift from cc, then the adjusted gift basis if sold at a gain would be the donors adjusted bases on date of gift.

Offline hachover

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Re: FBI Raids Orthodox Homes
« Reply #1042 on: July 07, 2017, 01:56:11 PM »
You are making a valid argument, but there are arguments to counter that. If it ever went to tax court, which I doubt it will, it would be interesting to see how true valuation experts will chime in on this.

There are logical arguments on both sides here, which just proves that it's a complex issue and so it's very unlikely to ever be pursued in court. Those who would argue that it should be taxable would need to take the risk of setting a precedent that could have outside ramifications.

Personally, I agree with Dan that it should be treated as a rebate and reduce the basis in the item you purchased to qualify for the rebate. Which would mean that in the case of money-making MS you could argue that ethically you should be reporting taxable income on the excess after the basis is reduced to zero.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline A3

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Re: FBI Raids Orthodox Homes
« Reply #1043 on: July 07, 2017, 01:56:53 PM »
The cash rebated may not be income for the IRS, but if your reporting costs you should report it at net of the rebate.

Offline Menachem613

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Re: FBI Raids Orthodox Homes
« Reply #1044 on: July 07, 2017, 01:57:01 PM »
If these miles are a gift from cc, then the adjusted gift basis if sold at a gain would be the donors adjusted bases on date of gift.

They are not a gift.

Commissioner v. Duberstein, 363 U.S. 278 (1960).

Offline Dan

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Re: FBI Raids Orthodox Homes
« Reply #1045 on: July 07, 2017, 02:03:51 PM »
Personally, I agree with Dan that it should be treated as a rebate and reduce the basis in the item you purchased to qualify for the rebate. Which would mean that in the case of money-making MS you could argue that ethically you should be reporting taxable income on the excess after the basis is reduced to zero.
Can't wait for the IRS to start going after people who buy $200 Visa GCs from OM for $190 for not reporting $10 of income :D
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline Menachem613

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Re: FBI Raids Orthodox Homes
« Reply #1046 on: July 07, 2017, 02:05:36 PM »
Can't wait for the IRS to start going after people who buy $200 Visa GCs from OM for $190 for not reporting $10 of income :D

It's a rebate.  No one is arguing that point.

Offline ChaimMoskowitz

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Re: FBI Raids Orthodox Homes
« Reply #1047 on: July 07, 2017, 02:09:23 PM »
Can't wait for the IRS to start going after people who buy $200 Visa GCs from OM for $190 for not reporting $10 of income :D
It's a rebate.  No one is arguing that point.
+1 We are talking about selling the rebate no matter what form you receive it in.
I just found a new supply of forks!

Offline Dan

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Re: FBI Raids Orthodox Homes
« Reply #1048 on: July 07, 2017, 02:38:57 PM »
It's a rebate.  No one is arguing that point.
And what happens when you get a $200 MO for that Visa card? Is that now $10 of reportable income?
Is that different that going to Amazon and buying $200 of items?
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline Emkay

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Re: FBI Raids Orthodox Homes
« Reply #1049 on: July 07, 2017, 02:39:07 PM »


cant believe that people are stealing from the government, and even worse from the rest of lakewood

It's a misguided sense of entitlement. Very much like you being entitled to compensation for not getting upgraded to a suite.

Offline yitzf

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Re: FBI Raids Orthodox Homes
« Reply #1050 on: July 07, 2017, 02:42:43 PM »
Not so fast there Skippy.  :)
What if the IRS takes the position the miles have no value and everything you sell them for is taxable?
The Way I understand it is even if Miles aren't Taxable It still is considered income for the programs. I'm not sure about Medicaid but for sure for Food Stamps
Never thought of that. Ouch!

The IRS has no standing in this issue

Offline ExGingi

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Re: FBI Raids Orthodox Homes
« Reply #1051 on: July 07, 2017, 02:46:33 PM »
If these miles are a gift from cc, then the adjusted gift basis if sold at a gain would be the donors adjusted bases on date of gift.
No way in the world one can argue that the miles/points are a gift! Or else people would be getting them randomly without required spend or anything of the sort.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline hachover

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Re: FBI Raids Orthodox Homes
« Reply #1052 on: July 07, 2017, 02:57:36 PM »
And what happens when you get a $200 MO for that Visa card? Is that now $10 of reportable income?
Is that different that going to Amazon and buying $200 of items?

Reportable income is not a matter of opinion - it's a question of law. Since there is no clear cut answer, no one will report it.

But we can state our opinions on the matter anyway. Mine is that yes, it should be income. Hard to imagine that anyone does this type of stuff (even cumulatively) to a scale that would interest the IRS.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline TimT

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Re: FBI Raids Orthodox Homes
« Reply #1053 on: July 07, 2017, 03:28:54 PM »
Hard to imagine that anyone does this type of stuff (even cumulatively) to a scale that would interest the IRS.
You would be surprised

Offline cholent

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Re: FBI Raids Orthodox Homes
« Reply #1054 on: July 07, 2017, 04:13:04 PM »
Don't ask stupid questions and you won't get stupid answers

Offline churnbabychurn

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Re: FBI Raids Orthodox Homes
« Reply #1055 on: July 07, 2017, 05:31:13 PM »
Reportable income is not a matter of opinion - it's a question of law. Since there is no clear cut answer, no one will report it.

But we can state our opinions on the matter anyway. Mine is that yes, it should be income. Hard to imagine that anyone does this type of stuff (even cumulatively) to a scale that would interest the IRS.
The law is very very broad. Income is income.. the burden of proof that the accumulated wealth in a bank account is magically not taxable would be on... Dan...

Section 61(a) of the Internal Revenue Code defines gross income as income from whatever source derived,  including (but not limited to) ..... basically everything!

Offline Redbull3

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Re: FBI Raids Orthodox Homes
« Reply #1056 on: July 07, 2017, 05:38:46 PM »
Reportable income is not a matter of opinion - it's a question of law. Since there is no clear cut answer, no one will report it.

But we can state our opinions on the matter anyway. Mine is that yes, it should be income. Hard to imagine that anyone does this type of stuff (even cumulatively) to a scale that would interest the IRS.
Points/Miles brokers, TA's...?

Offline cmey

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Re: FBI Raids Orthodox Homes
« Reply #1057 on: July 07, 2017, 06:18:11 PM »
Reportable income is not a matter of opinion - it's a question of law. Since there is no clear cut answer, no one will report it.

But we can state our opinions on the matter anyway. Mine is that yes, it should be income. Hard to imagine that anyone does this type of stuff (even cumulatively) to a scale that would interest the IRS.

Don't know about Lakewood but in general that is incorrect. I don't have first hand knowledge but have heard very reliable reports of scores if not hundreds of people doing 3-10 million a year MS on a 5% card a few years back? That was doable WITH holding down a full time job... harder now but still being done by going through a few more hoops...

Offline ExGingi

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Re: FBI Raids Orthodox Homes
« Reply #1058 on: July 07, 2017, 06:20:06 PM »
Don't know about Lakewood but in general that is incorrect.How about scores if not hundreds of people doing 3-10 million a year MS on a 5% card a few years back? That was doable WITH holding down a full time job... harder now but still being done by going through a few more hoops...
Inbox flooded.  ;)
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline chevron

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Re: FBI Raids Orthodox Homes
« Reply #1059 on: July 07, 2017, 06:29:03 PM »
What about swiping small business saturday swiping 200 cards at $25 each? is that 5k in income ?