Remember the days when you signed up for a new checking account and the bank would “thank you” by giving you a duffel bag, toaster, or a football phone? I bet you didn’t realize that these items may be considered taxable income.
In a recent tax court case, a taxpayer received “thank you” award points for opening up a bank account with Citibank that could be used toward an airline ticket . The bank issued a Form 1099-MISC reporting $668 of income, which was the value of the ticket. The taxpayer didn’t include the reported income on their tax return.
Because the award was given in exchange for depositing money in a bank account, the tax court held that it should be treated as interest income.