Andy2

CollegeFlyer:

All of your points are logical and very well written.

I do believe that industry standards and industry comparisons matter if and when a person argues with the IRS, and that it is more reasonable than not to assume that Fidelity, TD Ameritrade and Bank Direct do, in fact, comply with the tax laws (at least when corresponding to the IRS). If compliance occurred, it is clear that each of these financial institution placed either no value per mile or an extremely low value per mile (much lower than did Citi) if 1099-MISC is the correct form. I do agree with you that 1099-MISC is probably not the correct Form in most of these situations.

The point of my earlier post was that this thread is dying out and that the primary benefit of the thread is to provide the recipients of Forms 1099-MISC with our various thoughts regarding a realistic value of an AA mile, guidance of how to make adjustments on a tax return if the recipient believes that 2.5 cents per mile is incorrect, and to share reasonable legal arguments in support of making this adjustment to the tax return if contacted by the IRS. Personally, I think industry standards help in making those legal arguments.

I think that the SS example valuing an AA mile at 0.4 cents per mile was very good. There is a lot of difference between Citi's valuation of $625 per $25,000 and a value of $100 per $25,000. Not that much difference between $100 and $0.00 per $25,000.

What amazes me the most is that not a single poster argued that 2.5 cents per mile is a correct valuation, and almost every poster has experience with using frequent flier miles. That would be embarrasing to me if I were in Citi's tax department.