Airline Miles

Today TaxMama hears from Rachel in the TaxQuips Forum, who did something clever.
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“If I booked a ticket for a friend of mine with my airline points and I was paid the value of the ticket, is that considered taxable income? If so, which line would I put it on the 1040?
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Hi Rachel,

The airline miles are free to you.  

But you’re right.  Selling them is a taxable event.

Since you’re not in the business of selling airline tickets, you don’t need to treat it as business income.
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Just report it on Line 21 of your Form 1040 as Other Income (not subject to self-employment taxes).

 I hope she enjoys the trip.

 And remember, you can find answers to all kinds of questions about airline miles and other tax issues, free.
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Where? Where else? At www.TaxMama.com.

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