Did anyone receive the bonus without having to request it? If so, what was the time period after funding the account?
My 5K mile bonus just posted today with no intervention on my part. Account was opened on 6/22/10. I withdrew most of the funds on 11/12/10 - leaving $150 in the account. The miles showed up in my account today with a 11/4/10 posting date. Still waiting on the miles for my wife's account which we opened a few days after mine.
Ok, very strange situation just happened today. I received a 1099-INT tax form in the mail indicating I had received $125.00 in interest from my Citibank Ulitmate Savings Account.
I looked into this and calculated that I've received no more than $6 total for my Ultimate Savings Account that I opened in early in 2010 for the 5,000 AA miles.
So I called up Citibank to ask where this $125 in interest is coming from. The CSR had no idea, and was trying to give me some excuse, saying that if I used the 5,000 AA miles, then this is probably the interest for that. It makes no sense since my AAdvantage account and what I redeem with it has nothing to do with interest income from my Citibank savings account!
She transfered me to a supervisor who was just as perplexed as I was where this $125 is coming from. And she even said she received one of the 1099-INT forms with the exact same interest amount just yesterday as well! She took down my number and said she needed to do more research into what's going on and will call me back.
Has anyone who opened these USAs with Citibank received an 1099-INT form with $125 interest? How does 5,000 AA miles = $125? Not sure, but this is a bit worrying...
Ok, the supervisor was very nice and helpful, and she just called me back after looking more into it. She says the the interest income is indeed from whatever promotional "income" we received from opening the account.
However, she is just as confused as I am about how 5000 AA miles equates to $125 in interest income. If that were the case, I would've just opened an account that gives me $125 directly! That would've been more worth it
Ok, the supervisor was very nice and helpful, and she just called me back after looking more into it. She says the the interest income is indeed from whatever promotional "income" we received from opening the account.
However, she is just as confused as I am about how 5000 AA miles equates to $125 in interest income. If that were the case, I would've just opened an account that gives me $125 directly! That would've been more worth it
Best guess? Maybe that is what AA charged Citi for the miles and inorder to pass it off, Citi writes it off as "interest" and sends out the 1099.
I am in a similar boat, but with a MUCH larger number.
I received two envelopes from Citi yesterday. One was a standard 1099-INT with my savings account interest. The other was a 1099-MISC with a whooping $750 "Other Income" declaration. Where do they get off valuing mileage promotion points so high?
There is no explanation for the valuation on the 1099 form ... only a phone number to call Citi for questions. However, a long phone call to Citi has provided me with zero additional information. The Customer Service rep and supervisor could not even find any data in their system indicating that I received the tax document.
I'm left with either biting the bullet and reporting this ridiculously large valuation on my taxes (which means a very large tax hit), or coming up with my own valuation -- which will almost guarantee an audit due to the disparity in reporting between my return and Citibank.
Programs: AA Lifetime Gold, HH Gold, IC PLAT, Hyatt PLAT, SPG Gold
Posts: 411
Quote:
Originally Posted by bruinfan90
The other was a 1099-MISC with a whooping $750 "Other Income" declaration.
On my 1099-MISC it is showing $775 on Line 3 as "Other Income". I called last night and spoke to a supervisor. She could not find 1099-MISC under my account (though she found 1099-INT). She thought they may be charging for for redeeming ThankYou points or gift cards. I told her that I have never signed up for TY points but only for AAdvantage miles. She was baffled by it and opened a case for investigation. She told me to expect a call from her within 24 to 48 hours.
I suggest everyone getting this crap from Citi to call and have them open a "CASE" for investigation. May be it will wake up someone at Citi.
For those of you receiving the 1099-MISC with huge "other income" declarations, what Citi accounts have you opened last year with promotions? Did you open checking accounts, savings accounts? I'm assuming credit card accounts with promotions don't factor into this, but with all this sketchy action by Citi lately, I wouldn't put it past them...
Hmm, if Citi is sending out 1099 at 2.5c per bonus mile ratio, it's totally not worth it to do these checking/saving AA promotions considering you have to pay tax on it.
Programs: AA LT Gold; BA Silver; Hilton Gold; Marriott Gold
Posts: 2,660
If I got one of those 1099s, I'd donate 5,000 miles to charity the next year and take a $125 deduction. Hey, they said the miles were worth that when I got them, right?
This works, of course, only if you're in a position to itemize deductions and you don't need the 5K miles to use towards an award.
Let's see here: we all know that Citi buys AA miles wholesale at deep discount, at 1c or little cheaper.
Now, they turn around and distribute these miles to the public at a retail rate of 2.5 cents per miles, and send out 1099.
So, Citi writes off 2.5 cents of something they acquired for 1 cents; don't they owe taxes for the difference (reseller's profit)?
Programs: AA Plat 2MM, Delta Silver, Hilton Gold, SPG Gold
Posts: 2,656
Quote:
Originally Posted by neophyte
Let's see here: we all know that Citi buys AA miles wholesale at deep discount, at 1c or little cheaper.
Now, they turn around and distribute these miles to the public at a retail rate of 2.5 cents per miles, and send out 1099.
So, Citi writes off 2.5 cents of something they acquired for 1 cents; don't they owe taxes for the difference (reseller's profit)?
Regardless of what value they're assigning, where do they profit in this scenario? We aren't paying for the miles at a higher rate than what they paid. These are a promotional giveaway.
