19 Replies Latest reply: Apr 26, 2012 4:33 PM by anadyr RSS

Taxes (and not death, at least this time)

Alumni Steward Platinum 8 Reviews
Currently Being Moderated

IRS.jpgReading the fine print on the Marriott Rewards Facebook one million points sweepstakes I noticed that the winner of the grand prize (1,000,000 points) will be sent an IRS form 1099 in the amount of $12,500.00, (the actual retail value of those points).

 

Having won previous non-Marriott contests I can assure you that the 1099 also reaches the IRS, and is an audit trigger. 

 

That being said, the prize would be nice to win regardless of the tax consequences.

(For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Taxes (and not death, at least this time)
    jerrycoin Alumni Steward Platinum 60 Reviews
    Currently Being Moderated

    SS,

     

    Thanks for bringing this to our attention!

     

    I have felt for decades that 1099's will bring an end to FF/and point programs.  In the near future, people will not know what it was like to literally just say "Thanks", for a point stay.  There will be 1099's that will follow!

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

    • Re: Taxes (and not death, at least this time)
      Alumni Steward Platinum 8 Reviews
      Currently Being Moderated

      Yes and no Jerry. The IRS would love to have all the FF and MR information at their fingertips so they could determine what tax liability they are missing out on when we use points, but

       

      1. We earned the points through payng for stays
      2. The MR T.s and C.s tell us that the points have NO cash value
      3. We often use the points for other than hotel stays (upgrades, gifts, etc.)
      4. The IRS has a  job to do, our job is not to pay more taxes than we should!

       

      Here's hoping that if the taxman ever gets serious about these benefits we'll have enough warning to empty our accounts!

      (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Taxes (and not death, at least this time)
    nuhusker Platinum 2 Reviews
    Currently Being Moderated
    I'm never happy with a 1099.  Taxed enough already!

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Taxes (and not death, at least this time)
    bigmrm Platinum
    Currently Being Moderated

    My understanding of the tax consequences in the US is as follows:

     

    If you personally earned the points on your own, such as by staying at hotels and paying for them, then the points are considered a rebate and are not taxable. This is the case even for things like the mega-bonus promotions since they are given as rewards for paid stays.

     

    If someone else paid for your stays, such as an employer, then the points may be taxable because you are receiving "income" without any outlay.

     

    In the case of the 1,000,000 point contest, yes, they would be taxable because it is a sweepstakes winnings. It's not a rebate since you didn't have to spend anything to get them and it's not a gift since you actually had to do something to enter the contest.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

    • Re: Taxes (and not death, at least this time)
      Alumni Steward Platinum 8 Reviews
      Currently Being Moderated

      Very true.  You've entered and made a decision to enter so it is not a gift.  The IRS loves to hear about anything over 500 dollars, and diligently pursue winners who do.

      (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

    • Re: Taxes (and not death, at least this time)
      tryt53 Alumni Steward Platinum 5 Reviews
      Currently Being Moderated

      Well stated.  Thank you!

      (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Taxes (and not death, at least this time)
    Alumni Steward Platinum 8 Reviews
    Currently Being Moderated

    The full IRS rule is here.  Good luck understanding it!!!

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Taxes (and not death, at least this time)
    david_r Member 8 Reviews
    Currently Being Moderated

    As far as you know, is there any place where Marriott states their policy on the conditions under which they will do tax reporting associated with the awarding or use of Rewards points (other than the fine print in connection with the one million points sweepstakes that you mentioned at the beginning of this thread)?

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Taxes (and not death, at least this time)
    david_r Member 8 Reviews
    Currently Being Moderated

    If you received multiple copies of the same message from me, please accept my apology. I tried to post my message and got the error message "An error occurred while trying to submit your post. Please try again." I assumed it wasn't posted and I did try again (multiple times).

     

    I called Rewards customer support to ask about their tax reporting in connection with Rewards points. I don't think they really understood the question because they tried to refer me to my tax attorney or the Marriott property where the points were earned. When I was dissatisfied with those answers, they suggested that I call Marriott's corporate offices - which I'll try to do.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

    • Re: Taxes (and not death, at least this time)
      Alumni Steward Platinum 8 Reviews
      Currently Being Moderated

      No worries on the multiple posts.

       

      As far as the terms and conditions the word tax does not appear, but this does:

       

      Accrued Points and Miles do not constitute property of the Member. Points accrued by a Rewards Program Member are for the Member's benefit only and may not be transferred to anyone except as provided below. Points are transferable to a legal spouse or domestic partner in the case of documented death of the Member. In addition, there is a limited exception for the transfer of Points into the Rewards Account of a legal spouse or domestic partner in order to qualify for a specific Reward. See “Earn Points – Transferring Points from One Account to Another.” Points are not transferable to another person for any other reason, including divorce or inheritance. Any Points which Marriott Rewards deems in its sole discretion to have been transferred in violation of Rewards Program Terms and Conditions may be confiscated.


      So if not property then perhaps not taxable?  Depends I guess and I am not a tax attorney or tax preparer either.

      (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

      • Re: Taxes (and not death, at least this time)
        david_r Member 8 Reviews
        Currently Being Moderated

        I called Marriott's corporate offices and spoke with an executive there. He said that with the exception of the sweepstakes, Marriott's program is like other airline and hospitality loyalty programs - they don't do any reporting to the IRS either on the awarding or the use of Rewards points.

        (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

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