Originally Posted by
flytoeat
If you use the AS valuation of $20,000:
- 10% marginal rate, pay $2,000
- 15% marginal rate, pay $3,000
- 25% marginal rate, pay $5,000
- 28% marginal rate, pay $5,600
- 33% marginal rate, pay $6,600
- 35% marginal rate, pay $7,000
Any state income taxes not included. Would you want to win if you had this out of pocket cost for the prize?
The $20,000 value is what I also came up with using the generally accepted 2¢ a mile figure.
While the cost in taxes at first looks scary, if you have the money it's a sweet deal. For example, an F award to Australia on Qanta is 140k miles; cost of buying an F ticket is probably plus or minus $15k. Of course, there's always the problem of getting an F award seat.