Originally Posted by
vortix
Does anyone know a) if Chase reports the value of the checking account bonus miles as interest to the IRS via a 1099 form, and if so, b) how much do they value each mile at?
I know credit card sign-up bonuses are typically non-taxable income and are not reported to the IRS, but bank account bonuses usually have to be reported to the IRS as interest earnings.
This offer existed since 2009. So far no one has reported receiving 1099 from Chase.
In the 5K AA thread, the theory goes that Citi may have outsourced its tax compliance function to the foreign country... hence they go by the book that all bonuses from banking products are taxable, without knowledge about IRS has had ruling that value cannot be "reasonably" determined on miles...
However, there is also languages in the tax laws/regulations that "fair market value" can be used when there is no well-defined value...
The "fair market value" used by Citi is the price AA sells the miles, and that is 0.025 per mile.
Some one has successfully argued for an amended to 0 value 1099 Misc. So far no report about success in getting a amended 1099 INT.
Let's hope Chase would not start this nonsense as it is already end of January and there is no 1099 arrives anyone's mail box. Banks must send out their 1099 before January 31st unless there are extraordinary reasons.