Larry recently used his Southwest miles to purchase a free round-trip ticket to Paris, France (value $1,500). The frequent flyer miles used to purchase the ticket were generated by Larrys business travel as a CPA. Larrys employer paid for his business trips, and he was not taxed on the travel reimbursements. How much income, if any, will Larry need to recognize as a result of purchasing an airline ticket with points earned from business travel?

Discuss and analyze the tax issue(s) and explain your conclusion, using and citing sources of tax law for support (i.e., why did you reach this conclusion?). Begin by defining the issue(s) by citing the code/regulation section(s) that apply. For example, if the problem centers around a theft, start by defining what constitutes a theft from the code/regulations section. Then explain how those definitions apply to your facts/issues, and then support your position with cases, revenue rulings, etc. Remember to note the level and authority of cases, if they were appellate cases, and if there are any differences between trial and appellate level decisions.