Hey guys,
You’ve stated before that this [title/subject] can be done tax free, but I’m really struggling to find a source. The closest thing I can find is an IRS announcement that states that this is true for “personal use of frequent flyer miles or other in-kind promotional benefits attributable to the taxpayer’s business or official travel” (emphasis added).
That appears to apply to frequent flyer airline miles but not credit card points, because points are not attributable to business/official travel. Furthermore, the letter then goes on to say “This relief does not apply to … compensation that is paid in the form of travel or other promotional benefits.” Could this be denying credit card points (even if redeemed for “travel or other promotional benefits”) because such credit card rebates are generally considered ‘compensation’ if earned for making a deductible expense?
Any additional sources or clarification you can offer would be much appreciated. I’ve got points with a cash value of as much as five figures and am hesitant to use them for personal travel without having some confidence on this subject. Thank you!!