How Much is a Donated Miles Ticket Worth?

[ckmk47]

I donated a ticket I bought with miles to a friend of mine who's in a position to give me a tax donation receipt.
What is the value of the donation?  I'm inclined to use the price a cash ticket was going for at the time that the mileage ticket was booked.  But at this point, I don't remember the price. 
Or do I use the 1 cent per point value.  That receipt would not be worth very much to me.
Or the selling price of the points?
Or the largest legitimate price that ticket could go for, so I get the maximum tax deduction I can?

[Dan]

$0.

[nobiggy]

Quote from PEYD (company that buys and sells miles)

One of the most commonly asked questions directed to PEYD is whether customers have to report to the IRS the monies earned through cashing-out miles and points or report the value obtained when using miles and points for flights or other redemption options like hotel stays, car rentals or gift cards.

This issue is highlighted by the fact that the federal government has yet to regulate the rewards industry and determine the taxable status and overall value of credit card rewards and airline miles.

In 2002, the IRS issued a statement indicating that business professionals would not be held liable for the receipt and personal use of frequent flyer miles or other in-kind promotional benefits obtained by the taxpayer's from business or official travel.

[ckmk47]

Oh, my!  So I donated 60K MR pts, and I can't deduct it.
Didn't I donate a ticket worth $xxx ?


I know that's asking the Q again, but I'm kind of in shock.  When I told her not to pay me for the ticket, I thought the government would help eat my cost.  I know, I'm not really allowed to have her pay me for the ticket either.

[3yummyboys]

From my understanding, it can't be deductible because you never actually paid for it. Miles were accumulated based on spending or bonuses. That's also why you don't have to pay tax on mileage earning.

[myb821]

From my understanding, it can't be deductible because you never actually paid for it. Miles were accumulated based on spending or bonuses. That's also why you don't have to pay tax on mileage earning.

not true. You dont need to pay taxes because the miles are seen as a rebate on a purchase.

[Menachem613]

$0.

Why?

[3yummyboys]

not true. You dont need to pay taxes because the miles are seen as a rebate on a purchase.

I'm not an expert but that makes a lot more sense than the way I was thinking about it

[Club2000]

Why?

Since miles have 0 values as fare as airlines Bcs you can't sell it

So 0+0=

[henche]

I don't know the answer, but I believe there is  a general rule that donating something is not a realization even but can still be donated at FMV.  That's why you can make out like a bandit by donating appreciated assets and taking a tax deduction at FMV while never including the gain in income.

So the same theory could be true here, that you can donate it at FMV even though you never included it in income.

[ckmk47]

I don't know the answer, but I believe there is  a general rule that donating something is not a realization even but can still be donated at FMV.  That's why you can make out like a bandit by donating appreciated assets and taking a tax deduction at FMV while never including the gain in income.

So the same theory could be true here, that you can donate it at FMV even though you never included it in income.

I like this one.  I certainly saved them the money they would have paid for the ticket.

[Myccrabbi]

I like this one.  I certainly saved them the money they would have paid for the ticket.

Or maybe ask them to do some laundry for that amount

[ckmk47]

Or maybe ask them to do some laundry for that amount

That's kind of where we started. How much was my donation worth?  How much should the tax donation receipt be?

[Myccrabbi]

That's kind of where we started. How much was my donation worth?  How much should the tax donation receipt be?

$850

[ckmk47]

So you use the sale value of the points to price the donation.
What if the equivalent ticket for cash was $1200?  What if the equivalent ticket was $850 when I bought it for points (not that I would do that) and later was going for $1200?
True scenario:  I once bought a last minute ticket for her kid for 30K united pts.and $5.   The cash price at the time was $1391.  That year she gave me a receipt for $1391 - the amount I saved her.
In 2014, she B"H made a wedding and had 2 boys over seas in yeshiva, so I made her a slew of tickets. (Why wouldn't she ask me? Last time I didn't charge her anything but a piece of paper?)  But I didn't keep track of the cash price of the equivalent tickets.  So I posted the question here.


I think I'll come up with a ballpark price for those flights, and get a receipt for the approximate amount I saved her.

[Myccrabbi]

So you use the sale value of the points to price the donation.
What if the equivalent ticket for cash was $1200?  What if the equivalent ticket was $850 when I bought it for points (not that I would do that) and later was going for $1200?
True scenario:  I once bought a last minute ticket for her kid for 30K united pts.and $5.   The cash price at the time was $1391.  That year she gave me a receipt for $1391 - the amount I saved her.
In 2014, she B"H made a wedding and had 2 boys over seas in yeshiva, so I made her a slew of tickets. (Why wouldn't she ask me? Last time I didn't charge her anything but a piece of paper?)  But I didn't keep track of the cash price of the equivalent tickets.  So I posted the question here.


I think I'll come up with a ballpark price for those flights, and get a receipt for the approximate amount I saved her.

Actually I was using the sale  value of the points (1.4) but I definitely see your angle as well.

[ganizzy]

I'm going thru this now.  Someone bought a ticket for a student of ours.  He actually is an accountant.  He asked his boss who said that he should price out that exact ticket the day he got the mileage ticket  and print it out.
Then we can give him a non cash donation receipt for a ticket worth x amount.
It was a one way to Europe so he said it priced at 1300.
Before i write  that receipt, i want to make sure the info he gave me is accurate.
I will ask an accountant i know in shul tom

[Ergel]

Come to Canada. You can legit get a full deduction.

[Dan]

Bottom line, ask an accountant if you can take a deduction for something with a zero cost basis.

If you can, we can all get out of paying any federal taxes by just donating some F class tickets

[Ergel]

Bottom line, ask an accountant if you can take a deduction for something with a zero cost basis.

If you can, we can all get out of paying any federal taxes by just donating some F class tickets

Come to Canada. You can legit get a full deduction.

Although, doing it a lot will trigger an audit for the organization (which many claim they don't want to go through even though they are clean...)