Right. If you paid for the flight, you got the flight. The miles are currently considered incidental in that they are not taxed. Since they are not taxed, you can't deduce them when donating.
If you outright buy the miles, they do have value, and you can deduct that value when donating.
Of course, you can do whatever you wanton the taxes. It's just a question of what's legal and what gets caught.
And sometimes it's just weird. I've had things on my taxes that looked odd, but our tax guy (oddly enough,and randomly, a fellow FTer
) assured me that it was OK and pointed me toward the appropriate documentation.
Cheers.
I think there is some confusion regarding miles received when trips are company paid as compared with personally paid travel. Due to political pressure, miles earned for business paid travel are not taxed, even though they would be subject to tax, unless the employee used them only for business travel. In reality, there isn't much difference between getting miles from an employer paid ticket, then there would be for any other item of value received from your employer or due to a rebate on an item that was fully reimbursed by your emplyer.
Miles earned for personally paid travel wouldn't be subject to tax, as it is simply a rebate of personal income that was used to purchase the ticket.
I don't buy the argument that because I am not taxed for receiving something, it is not tax deductible. In the case you described, I was already taxed when I earned money to buy the ticket. The ticket and miles given to me by the airline, in exchange for this money, have already been taxed, because I paid taxes on the money I used to buy the ticket. If an individual buys something and gets part of the money back, why would an extra tax on this ever be due?
Let me put this another way. If you buy a ticket, and the airline gives you something back (miles, cash, whatever), that item has value. Since it is already your money (think.. rebate), of course you wouldn't be taxed again for the airline giving part of your money back to you. If I buy an Imac and an Ipod and get a $229 rebate from Apple, I don't pay tax on the $229. If I donate the $229 to charity, of course I can deduct it, as the $229 is mine. If Apple gives me back $229 worth of airline miles, are you suggesting that I can't deduct them to charity and claim the deduction? How is this different if I buy a plane ticket and get miles worth $229.
If my employer pays for the IMAC and IPOD and I keep the $229, then of course I can't give it to charity and deduct the $229, unless I also report the $229 as income. The $229 is still taxable income, generally, even if I don't donate it. Make sure you count the Federal Excise tax on plane tickets when you are adding up taxes paid for income tax deducations.