"Alex" <abuin[at]dialaccess.com> wrote:

- quote -

First, a question: How did you obtain these miles? Were they
based on "personal" flight (vacations, etc.) that you paid
for yourself? Or were they based on "business" flight for
which you were reimbursed by your employer and/or claimed a
tax deduction? Or are they some of each?

In the first case, you ~might~ be entitled to a deduction IF
you can establish your "basis" (ie: "cost") in the miles. I
would suggest 1 cent per mile as a reasonable estimate, but
there is no guarantee that the IRS would accept that.

In the second case, the cost of the miles has already been
deducted (either by you or your employer) and therefore no
ADDITIONAL deduction is available. In fact, if you use
"business" miles for "personal" purposes, they would
technically constitute taxable INCOME (per IRC 61). However,
the IRS has stated that they will not assert deficiencies
based on a failure to report such income.

In the third case, where business and personal miles have
been commingled, all the bets are off in my opinion. In the
absence of SUFFICIENT RECORDS to determine the "basis" (if
any) of the miles used, I wouldn't be surprised if the IRS
summarily disallowed any claimed deduction along the lines
you've described. Or, at least, there would likely be an
argument over the "ordering" of the miles used (FIFO, pro
rata, etc.) as I doubt the IRS would accept "specific
identification."

Also, note that deductions for medical travel can have their
own pitfalls. My comments are limited solely to the FFM
issue.

MTW

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smithff33[at]aol.com (Herb Smith) wrote:
- quote -

Thanks, I guess next time I should save the miles for the
trips to Vegas instead

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"Alex" <abuin[at]dialaccess.com> wrote:

- quote -

First, a question: How did you obtain these miles? Were they
based on "personal" flight (vacations, etc.) that you paid
for yourself? Or were they based on "business" flight for
which you were reimbursed by your employer and/or claimed a
tax deduction? Or are they some of each?

In the first case, you ~might~ be entitled to a deduction IF
you can establish your "basis" (ie: "cost") in the miles. I
would suggest 1 cent per mile as a reasonable estimate, but
there is no guarantee that the IRS would accept that.

In the second case, the cost of the miles has already been
deducted (either by you or your employer) and therefore no
ADDITIONAL deduction is available. In fact, if you use
"business" miles for "personal" purposes, they would
technically constitute taxable INCOME (per IRC 61). However,
the IRS has stated that they will not assert deficiencies
based on a failure to report such income.

In the third case, where business and personal miles have
been commingled, all the bets are off in my opinion. In the
absence of SUFFICIENT RECORDS to determine the "basis" (if
any) of the miles used, I wouldn't be surprised if the IRS
summarily disallowed any claimed deduction along the lines
you've described. Or, at least, there would likely be an
argument over the "ordering" of the miles used (FIFO, pro
rata, etc.) as I doubt the IRS would accept "specific
identification."

Also, note that deductions for medical travel can have their
own pitfalls. My comments are limited solely to the FFM
issue.

MTW

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abuin[at]dialaccess.com (Alex) wrote:

- quote -

Since the frequent flyer "miles" are not taxable income, the
use of them would not create a deduction, medical or
otherwise.

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- quote -

value when deducting for medical expenses? (we went over the 7% of
income threshold for the year) Does the IRS give miles a certain value
for this purpose?

Thanks in advance

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