An associate has a high volume, low margin business. He tries to eek out every little benefit he possibly can from his transactions, including amassing airline miles.
If I were to allow him to use an airline credit card that's in my name by first depositing the amount he will charge with the CC, then using the card for his transaction, what are the tax implications for me?
I will be accumulating miles (which I will share with him), but all the transactions on the card will be traceable back to his business with a diligent paper trail. His accounting is tight.
Now, the CC is in my name. So what sort of red flags are set off when a high volume of charges and deposits are logged on this card? Is a paper trail in my associates' business accounting sufficient to deflect any claim that I am not paying taxes on either the money used to pay off the CC or the airline miles themselves (can airline miles be a taxable income???)?
What are the possible negative implications of going through with this (besides the risk I take of potentially being saddled with a balance in case his business failed or having a bitter falling out, etc...)? I just need advice on the accounting and tax implications.
Many thanks!
If I were to allow him to use an airline credit card that's in my name by first depositing the amount he will charge with the CC, then using the card for his transaction, what are the tax implications for me?
I will be accumulating miles (which I will share with him), but all the transactions on the card will be traceable back to his business with a diligent paper trail. His accounting is tight.
Now, the CC is in my name. So what sort of red flags are set off when a high volume of charges and deposits are logged on this card? Is a paper trail in my associates' business accounting sufficient to deflect any claim that I am not paying taxes on either the money used to pay off the CC or the airline miles themselves (can airline miles be a taxable income???)?
What are the possible negative implications of going through with this (besides the risk I take of potentially being saddled with a balance in case his business failed or having a bitter falling out, etc...)? I just need advice on the accounting and tax implications.
Many thanks!