No tax take-off for frequent flier miles — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

No tax take-off for frequent flier miles

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Q I have frequent flier miles that decreased in value this year. Am I able to deduct a loss as a miscellaneous expense or casualty loss? S.J.U., Houston

A No. Essentially, frequent flier miles are merely an offer of a discount on future airline flights. Since you didn’t pay anything for this privilege and you have no tax “basis” in the mileage, you don’t realize any tax-deductible loss if the discount loses value or it expires.

Tip: On the other hand, you don’t have to recognize any taxable income when you’re granted or offered frequent flier miles, so it evens out.

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