Originally Posted by
redtop43
We're always curious to see different cash valuations of miles, so here's an interesting data point.
AA Shopping is running a contest where you get extra entries for doing stuff they'd like, and first prize is $2500 cash and 100K RDMs. The fine print says that the value of the first prize is $4910. Meaning that the value of 100K RDMs is $2410. So they "value" the miles at 2.41 cents per mile.
A curious contrast to the imputed interest for the Bask Bank miles account, which values them to you at 0.42 cents per mile. Admittedly, they have an incentive to make the exchange rate favorable because it reduces the taxes due from the account holders, and therefore makes the account more attractive.
Yeah I'm surprised at the low valuation for 1099 purposes.
They can have an "incentive" to make the accounts more attractive-- but there has to be a reasonable basis.
Before they had an absurdly high valuation. It made the account unattractive.
In any event even if you as the consumer are individually any challenge by the IRS , I would think that the liability falls 100% on Bask.
After all, you are honestly reporting the amount on the !099 Misc as reported to you.
I think this tells us that Bask is paying AA about 40 basis points per mile!!!!!!!!!!!!!!
I don't see how they can value the miles at less than thy pay.
In any event I don't see the account as a value added proposition now that interest rate have risen and 5.25 % in a 100% liquid savings account . ( not a CD) is easily available at FDIC - Insured online banks free of any management fees