Guess what counts as taxable interest income now? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Guess what counts as taxable interest income now?

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In a new case, a taxpayer who used 500 “thank you points” for opening a bank account at Citibank to buy a round-trip airline ticket was taxed on the $668 value of the ticket.

The Tax Court treated this like taxable interest income absent any showing that the ticket’s value was less. (Shankar, 143 TC No. 5) But airline miles received for flying on behalf of your company or for using a credit for purchases remain tax-free.

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