Should i take 25k Alaska miles for $206 approx.
Oct 21, 2014, 8:50 pm
#1
Original Poster
Join Date: Feb 2014
Posts: 4
Should i take 25k Alaska miles for $206 approx.
I got 25k Alaska miles in Alaska Airlines Field Trip Adventure Sweepstakes. But they also say that i would get 1099 form for $687.50. At 30% tax for $687.5, i would end up paying $206 approximately. I feel i could get 25k Alaska miles for $75 by applying for BofA Alaska Airlines card. Should I take it? Would like to know.
Thanks.
Thanks.
Oct 21, 2014, 8:53 pm
#2
Suspended
Join Date: Oct 2006
Location: Atherton, CA
Programs: UA 1K, AA EXP; Owner, Green Bay Packers
Posts: 21,690
Tell them if they really think the miles are worth $687 to just send you a check for that amount.
Talk about overvaluing! Worth more like... Well, $206.
Talk about overvaluing! Worth more like... Well, $206.
Oct 21, 2014, 9:14 pm
#4
Join Date: Jan 2001
Posts: 2,838
You can document that they are selling miles for 2 cents each when purchased in conjunction with a ticket. When my wife won 100K in an AS contest, we provided a different valuation on that basis, with our CPA's advice. YMMV.
Nonetheless, I would buy AS miles at less than 1 cent (.00824) if given the opportunity.
Nonetheless, I would buy AS miles at less than 1 cent (.00824) if given the opportunity.
Oct 21, 2014, 9:17 pm
#6
Join Date: Jun 2005
Programs: AS MVPG
Posts: 2,209
Is the prize transferable? $206 for a domestic round-trip isn't a bad deal, maybe have any friends or relatives that would be interested in it?
As for how they came up with the value, that's what you'd pay if you bought miles. I'd be very happy if miles were exchangeable back to cash at that rate
As for how they came up with the value, that's what you'd pay if you bought miles. I'd be very happy if miles were exchangeable back to cash at that rate
Oct 21, 2014, 10:13 pm
#7
FlyerTalk Evangelist
Join Date: Jun 2007
Location: PDX
Programs: AS 75K, BW Plat, Marriott Gold, IHG Plat, Hilton Gold
Posts: 10,724
I'm just glad to hear someone actually wins these things sometimes.....if you sign-up for the 25K Alaska Visa with the $100 statement credit after a relatively painless $1000 in spending, you've actually got them to give you $25 for the 25K 
Too bad you can't trade it for 4 MVPG upgrade certs, but that may come out to be even more $$....
Too bad you can't trade it for 4 MVPG upgrade certs, but that may come out to be even more $$....
Oct 22, 2014, 1:52 am
#8
Formerly known as stellertony
Join Date: Oct 2006
Location: MEX
Programs: UA Gold, DL Gold, NEXUS, APEC
Posts: 1,146
I would definitely take it, personally - i can easily get twice that value out of them using them to fly to Anchorage, sometimes even more. (Granted, I'm in a significantly lower tax bracket so I wouldn't pay nearly as much in taxes, but still.)
Oct 22, 2014, 8:37 am
#9
Join Date: Jul 2004
Location: Seattle, Wa
Programs: AS 75K & BR Member- HHonors Diamond - Hertz PC - Marriott Titanium - IHG Ambassador
Posts: 2,379
Take it. you can enter a different value while doing your taxes. one that is much more realistic. I'd say it's worth a couple hundred bucks (ACV) and when factored into your personal actual tax rate should have very little overall significance on your yearly taxes. I've never allowed a 1099 to go through at the stated value.
I wouldn't turn it down.
Congrats on the Win !
I wouldn't turn it down.
Congrats on the Win !
Oct 22, 2014, 9:39 am
#10
Join Date: Feb 2007
Location: PUW
Programs: AS MVPG
Posts: 131
Do you have to pay SS taxes on this as you would with wages? 30% seems high unless that's true. My effective tax rate is around 13-14%. They're probably withholding the max and you'll get $100 or so back when you file your taxes.
Unless you're actually in the 30% tax bracket and you shouldn't be caring too much about a $100 bucks
Unless you're actually in the 30% tax bracket and you shouldn't be caring too much about a $100 bucks
Oct 22, 2014, 10:25 am
#12
Original Poster
Join Date: Feb 2014
Posts: 4
30% was my approximate number. Should be less I think, I didn't actually calculate. I think I would take it and enter a different value when I do my taxes. Thank you all for your suggestions, they were helpful in deciding.