Originally Posted by
Happy
I believe years ago a winner of 1 million AA miles ended up gave up his winning because the tax bill was huge. (AA did report the winning and tagged a ridiculous valuation to it.)
I'd get a good tax lawyer before giving up such a prize. What the airlines charge to buy miles outright bears little relation to how we value the miles.
I decide whether to use miles or cash for family member tickets, using a valuation of 1.2 cents/mile. That would value this 100K prize at $1200.