A FlyerTalk Posting Legend
Join Date: Feb 2001
Location: Berkeley, CA USA
Programs: Piggly Wiggly "Shop the Pig!" Preferred Shopper
Posts: 57,084
I think the $.025 per mile overstates the fair market value of miles. There is a pretty robust market for the purchase and sale of miles, and I'm not talking about the "retail" sale option the airlines offer. I'm talking about the mileage brokers.
Were it for my taxes, I'd find two or three mileage brokers, get the applicable prices for purchase/sale, and come up with an average. This, I would argue to the IRS in a statement at the back of my 1040, is the accurate FMV of the miles. I'd declare that amount in Schedule B for interest income.
That's me, though. I'm fine with opening up the possibility of battling with the IRS where I am confident of my position. Others might really dread such a potential battle.