Originally Posted by
AArlington
Miles in my account are completely useless until redeemed. Once redeemed, their value is only equal to the lowest cost ticket on any carrier also available at that time.
At least, that's the approach I'd take
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Unfortunately, the IRS will lump this with the argument that "dollars in my bank account are completely useless until spent."
It is possible to base a taxation system on consumption rather than income, but thus far the U.S., in the great wisdom of its citizens' elected representatives, has chosen not to do that. The concept of an "income tax" is simple: if you get it, you are taxed for getting it rather than for what you do (or do not do) with it later on.