Originally Posted by
cepheid
Technically, you are... all income must be declared on your return, whether it's from a regular job, a hobby, or whatever. Remember, that's how they got Al Capone...
(And courts have ruled that miles from business travel are a taxable perk if the business deducts the travel expenses... the IRS simply doesn't tax the miles because they haven't figured out a cost-efficient way to do so.)
Unless you are deducting the cost of the ticket, etc. which generated the miles, it is merely a "rebate" and would not be taxable income.
I remember in the 80's a number of court cases that held that property should be freely alienable and that contracts were to provide for mutuality of treatment. Restrictive covenents were rarely enforced unless narrowly drawn and a compelling public interst or policy justified the restriction. Airlines sell billions of miles, hence they don't want to have to compete with you selling them. Though you never know how a court would view this, you know that it would be a major hassle getting to that point.