Originally Posted by
dhuey
pinniped, you raise valid concerns about things that could go wrong for those who hold miles. But regardless of the merits of those concerns, we still come back to the key question: fair market value. Whatever the ups and downs of miles, there is a very active market for their sale and purchase. That I suggest is all that really counts when the question is their value for tax purposes.
But don't you think the valid concerns factor into quantifying a valid discount to the fair market value of miles? Throughout tax and other areas of law, uncertainty as to whether and when something can be converted to a cash equivalent causes a reduction of value? Also, size matters. 23,500 miles will get you one-way from Chicago to Witchita on a regional jet, with a Greyhound bus trip back. 200,000 will get someone to Europe and back in business class, yet we act like the cent-per-mile value is the same whether the recipient got 23,500 versus 200,000.