Buy Kelloggs Special K with Komen AAdvantage certificates (100 American miles per box that can be doubled with a donation) on sale this week for $1.49/box at KMart. Using the Komen $10 donation per 10 certs for an extra 1K miles means the cost is only about 1.25 cents/mile.

You may also want to look at http://www.flyertalk.com/forum/Forum71/HTML/012266.html

New movie: Pudding Guy Meets Special K

Theater reportedly sold Nutrigrain Bars during intermission of that flick!

All I can say is that is board is awesome!!! I managed to buy out 7 K-Marts of all their Special K cereal and have a rain check for 200 more boxes. Just call my grandma the "Cereal Lady!!!" Look at everyone that benefits:

1. My grandma gets the miles
2. I get a tax write off for donating the cereal to a local food bank
3. K-Mart gets some needed business to help them get out of bankrupcy!

...but more importantly...

4. Our local food bank gets LOTS of healthy cereal this winter
5. The Susan G. Komen Breast Cancer Foundation gets a donation to help research to fight this terrible disease.

I do not believe that you would be able to deduct entirety of the food bank donation or the Komen donation. The problem with the food bank donation is your reduced basis because your net cost of the purchase is reduced because you received frequent flier miles in return.

The problem with the Komen donation is that it is a sale -- you paid money to the charitable organization and received something in return. For tax deduction purposes this limits your deduction to the amount paid less the fair market value of what you received.

For the IRS to call you on this, wouldn't they have to acknowledge the value of a frequent-flyer mile? If they do that, then wouldn't they have to acknowledge every coupon you clip out of the Sunday paper as income? It's the same concept...

I would think that a charitable donation in order to receive a coupon or discount at another merchant is still deductible. But then again, I'm not a lawyer...

Geez, not this tax thing again. Just round up to the nearest $100K and be done with it!

I just claim the actual value of what I spend on the products and attach the itemized receipt to the one the food pantry gives me. Why mention the miles at all?

Hey "Leonna"! What did you say that would cause you to create a new handle to say it?

Don't forget to add the cost of postage to this. It can really add up since they limit the # of coupons in an envelope!

Not meaning to be snide, but the last sentence says it all.

The IRS has always acknowledged that the miles have value, they've simply said they choose not to tax the receipt of them as income ancillary to business travel, unless the recipient converts them to cash or a cash-equivalent. For instance, if you win them in a contest, you'd better believe the IRS will come knocking on your door for its "share".

As to coupons in newspapers, those are a discount, and as such simply lower the amount you pay for the item. Not taxable as income, any more than the difference between regular price and "sale price" is taxable; however, in some states you may still have to pay sales tax on the "before coupon" price.

As to deductable amount when you contribute to a charity and they give you miles for it, I believe the charity tells you (in the "receipt" they send you) that the deduction must be reduced by value of the miles you got for the contribution (usually set at about 2.5 cents per mile). Same as when you get anything else for your contribution, whether it's a subscription to a magazine, a backpack, an umbrella, a t-shirt, whatever (except things with no or only nominal value, like a pin).

On the question of tax deductions for contributing miles, or for contributing boxes of cereal after taking off the "miles" coupons, run a "search" for the words "tax deduction" in this forum, and you'll find lots of discussion on the subject.

Tax laws are not "intuitive", you really *do* have to be a lawyer (or accountant).