My take on your original question is to consider an analogy: suppose you buy a piece of real estate at a bargain price, split off a portion to use yourself, and donate the rest. I am not an expert in this, but there are conditions under which you can deduct the fair market value for the donated portion, even if it exceeds the amount you paid for the entire original parcel.

You have a similar situation, in that the FF benefit makes the item worth more than you paid for it. So check up on the rules for donating appreciated property (there are some limitations based on a percentage of your income, and perhaps other limitations), post your findings at fairmark.com, and see what their gurus think.

My non-expert feeling is that you probably get the full deduction. However, once you take that full deduction the cost basis in your FF miles is zero. The IRS could then have a strong argument that you owe tax on the use of the miles. Here is where the recent announcement may come to your rescue. You didn't accept the miles in lieu of payment for services (in a bid to evade taxes), so you may be relatively safe. Without the announcement, I would have said that you almost certainly owed taxes on the miles due to the zero basis. My $.02, worth at least what it cost you. :-)

I'd sure like to see the look on the face of the IRS agent who audits a form (8332?) listing all those donations of property and sees $x000 of magazines! This is a humorous way of saying that these donatinos are a red flag, and the rest of your tax return had better be audit-proof if you try this...