While miles may not be considered taxable income in isolation (earned by flying), unless sold for cash or barter, must their value nevertheless be considered as an offset when earned as a result of a deductible transaction? That is the ultimate question, and a reasonable answer would seem to be that they must.

When you buy a subscription or book from, for example, Focus on the Family in Colorado Springs, CO, they will send you a receipt that shows the fair market value of what you bought from them, and that thus allows you to compute the value of any contribution.

By subtracting the fair market value of what you actually received from the total paid, you arrive at the deductible "donation."

In the case of recipients of donated InsideFlyer subscriptions, while the charity may issue a receipt showing the value of a "donation," they have no way of knowing what you "received" in return (the miles, since they did not provide them) nor their value.

[The same would go for cereal.]

If you are conscientious and desire to follow the law, you should subtract the fair market value of the miles received. Now there's a problem of it's own . . .

Some people may use a fairly low valuation!

Willful undervaluation of the fair market value of those miles could result in criminal or civil penalties by the IRS and various courts, but there does seem to be a lot of legitimate appraisal variability of the fair market value.

That's what accountants, tax lawyers, appraisers, frequent flyer consultants, and similar professionals are for. I am not undertaking to provide any such advice.

If you get overly aggressive, though, and get audited, the legal and professional fees in fighting the IRS may offset any "savings" in pushing the envelope too far.

Just my 2¢ worth.