I have a Chase biz ink card and biz checking account for a C Corp and I accumulated several UR points. I also have personal CSP. Since the best way to redeem the points can be via CSP (travel), I am looking for the best ways that the biz UR points should get redeemed.
What is the best way to redeem the accumulated UR points on Chase biz cards? Shall it be exclusively for biz (redeem as cash to biz checking), or redeem for biz a travel (ticket purchase via Chase ink)? Can I pool them to CSP, book a biz flight and redeem the points?
Do bookkeepers and CPAs track the UR points in the business financial statements and tax forms?
Fico8: EX~EQ~TU~840 (12 month goal~850).
Personal redemptions of miles for flights, points for hotel stays are not taxable. You can transfer to CSP and use for your personal travel.
I never use miles for business travel because the travel is deductible and I bill for some of my travel. Plus it's part of doing business.
My MR points, UR points and AA miles are used personally.
Don't have the cash put into business account because that is considered taxable income.
Also, you never have to account for miles or points.
It might depend on the business type. Based on my CPA, she recommends to redeem for business related purposes only and the redemption is considered taxable income for the business.
My take is that since the point transfers from biz to personal accounts are still getting included in the business credit card statement (in the first page as a separate table), in case of an audit for a C Corp, it might be an issue.
Sole Prop might be a different story, since it has more relaxed regulations and possible audits.
@xenon3030 wrote:It might depend on the business type. Based on my CPA, she recommends to redeem for business related purposes only and the redemption is considered taxable income for the business.
My take is that since the point transfers from biz to personal accounts are still getting included in the business credit card statement (in the first page as a separate table), in case of an audit for a C Corp, it might be an issue.
Sole Prop might be a different story, since it has more relaxed regulations and possible audits.
Well she is wrong. I own S Corps and LLC partnerships and any miles redemption for travel are not taxable to the business or taxable personally.
I know many CPAS that don't know many things and just because she has those letters doesn't make her correct.
I transfer ink+ UR points to my CSR, Amex MR points stay in one pot (personal and business combined and I use my personal Citi AA executive for all my business and hotel stays and reimburse myself.
Suggestion, find another CPA that knows business and business tax matters.
IRS doesn't audit CC statements regarding miles or points because they don't need to as the code relates to mile redemptions for travel.
I asked several CPAs in the Bay area and all were saying that it gets considered as a taxable event, as soon as these biz related points get redeemed (it may depend on state or business type, since @redpat's CPA was recommending something else):
Here is my take until now:
If I pool e.g. 100k points from my CIC biz card to my CSP card and book a flight ticket of $1.5k for a personal use, it is a taxable dividened income. I may consider the FMV of the points (~$1k), to issue the 1099-DIV form by corporate at the end of the year.
It may look good, if the business is solo-founder (he needs to pay e.g. 30% of this $1k in personal tax, while he purchased a $1.5k flight ticket) but if there are multiple people on board (co-founders, board of directors), it may result some issues like conflict of interest or transparency.
I see whether I can get the opinion of the other CPAs.
@xenon3030 wrote:I asked several CPAs in the Bay area and all were saying that it gets considered as a taxable event, as soon as these biz related points get redeemed (it may depend on state or business type, since @redpat's CPA was recommending something else):
Here is my take until now:
If I pool e.g. 100k points from my CIC biz card to my CSP card and book a flight ticket of $1.5k for a personal use, it is a taxable dividened income. I may consider the FMV of the points (~$1k), to issue the 1099-DIV form by corporate at the end of the year.
It may look good, if the business is solo-founder (he needs to pay e.g. 30% of this $1k in personal tax, while he purchased a $1.5k flight ticket) but if there are multiple people on board (co-founders, board of directors), it may result some issues like conflict of interest or transparency.
I see whether I can get the opinion of the other CPAs.
You are welcome. According to 2002 IRS announcement.
Your take on 1099-DIV or FMV are incorrect.
Lol, I guess Bay area CPAs are not too bright......