Originally Posted by
ClimbGuy
That said if that same man goes on to sell each loaf of bread for $1 each, he has made a profit of $5. That $5 is taxable.
I paid $1,000 for $1,000 and 1,000 miles and then sold what I had bought for $1,000 for a profit of 1,000 miles.
I'll agree that odds are nothing will happen w/o 1099s and it is very difficult to put a $ value on a mile.
If you truly sold the coins at more than you paid for them, I would agree. But you seem to consider your deposit of the coins as the selling of the coins at a gain. I'm not sure I agree with that. If you got miles for buying shaving cream, you wouldn't have income each time you shaved. Most people make banking transactions each day just like they shave every day. I could certainly see an IRS agent arguing that the entire coin aspect is a pure financial transaction (with a reduction in the basis of the coins prior to your "sale"), but I'm not sure the law would support the agent's argument. Two reasonable people could certainly disagree on this point, though.