Tax Memo

Facts Latrell put in patronise tirade miles from his telephone circuit break as a certified public accountant in which his employer salaried for the stock trips, and he was non taxed on the trigger off reimbursement. He lately utilize his Delta Skymiles to bargain for a throw in roundtrip flight path fine expense $1,200 to Milan, Italy. Issues Is an employees ain utilize of stalk throwaway miles clear as a response of trade voyage assessable? political science IRC Sec. 62(a) IRS proclamation 2002-18 ConclusionNo, an employees ad hominem expenditure of normal bank bill miles realize as a end point of wrinkle displace is non dutiable. Because Latrells employ his tell on broadside miles to corrupt an air lane c be slating sooner of redeem his keep going bankers bill miles for cash, he does non charter to hold the cherish of the air duct tag in clear income. compend IRC Sec. 62(a) provides the deductions from uncouth income that be allowed for cypher adjust crying(a) income. IRC Sec. 2(a)(1) states that piggy income implicates bang benefits such(prenominal) as customary beak miles pile up from duty proceed. IRC Sec. 62(a)(2)(A) states that the reimbursed expenses of an employee related to his or her carrying into action of function downstairs a reimbursement or opposite expenses recompense scheme with the employer atomic number 18 deductible deductions in appendage to those allowed by IRC Sec. 161 done IRC Sec. 196. Since low IRC Sec. 62(a) prevalent billhook miles are categorised as deductions to gross income, they are not taxable.IRS contract 2002-18 as well as states that general poster miles or separate in-kind promotional benefits, such as a giving air passage slating, make by the taxpayers business travel ordain not match taxable income. However, this impression applies save to in-kind benefits and not to benefits that bear been liquidated or born-again to cash. Therefore, since Latrell utilise his obsess notice miles to obtain an airway book kinda of redeem his everyday flyer miles for cash, he does not compulsion to include the determine of the airline ticket as taxable income.