Originally Posted by
pjoalfa
Again, I'm not a tax attorney, but if the recipient agrees to the valuation presented, that's gonna be it. So theoretically, if AA calls miles worth 2.5c each and you accept it, that's the value...
Not correct. AA is telling you what value they will report to the IRS. The IRS knows that prize values are often inflated, such as using full list price for a TV set that typically sells for less or the full "rack rate" for a hotel room. They have well-defined procedures for claiming and documenting a lower value.