tax deductions?
Jan 5, 2000 | 12:37 pm
#1
Original Poster
Join Date: Sep 1999
Location: St. Joseph, MO USA
Posts: 81
tax deductions?
Question for the board: While donated FF miles per se are not tax deductible, would it be possible to get an award ticket, donate it to a tax deductible charity, and then write off the value of the ticket?
Ex: If your church is going to send a missionary to x country, would it work to redeem a ticket in that missionary's name, find out the cost of that ticket, and then have the church write a tax deduction letter specifying the value of the donation, which you could then write off?
And, would this violate any FF program guidelines, even though you are not "bartering, selling, etc..."??
Bob
Ex: If your church is going to send a missionary to x country, would it work to redeem a ticket in that missionary's name, find out the cost of that ticket, and then have the church write a tax deduction letter specifying the value of the donation, which you could then write off?
And, would this violate any FF program guidelines, even though you are not "bartering, selling, etc..."??
Bob
Jan 5, 2000 | 6:12 pm
#2
Original Member
Join Date: May 1998
Location: NJ
Posts: 3,343
I'm not a tax lawyer (AND I don't play one on TV), but the value of your tax deduction for something like this is usually your cost basis in the property, except in very rare circumstances in which the Congress has allowed a FMV basis to encourage gifts to charity (such as of appreciated securities). So, I think you would have a hard time surviving an audit. But, not everyone gets audited, ...
Djlawman
Djlawman
Jan 7, 2000 | 11:57 pm
#4
Join Date: May 1998
Location: Naples FL, Munich DE
Programs: UA MM, AA 2MM, Marriott LT Titanium, Hilton Gold
Posts: 6,817
"Neither frequent flyer miles nor awards have any cash value."
Maybe not, but if you win miles or free tickets, the IRS comes after you for tax on the "value" of the prize.
Maybe not, but if you win miles or free tickets, the IRS comes after you for tax on the "value" of the prize.
Jan 8, 2000 | 7:36 am
#5
Join Date: Nov 1999
Location: Los Angeles, CA, USA
Programs: AA PLT, SPG GLD, PC PLT SPIRE
Posts: 4,531
Sheryl:
"Neither frequent flyer miles nor awards have any cash value."
Actually, frequent flyer miles and awards have cash value (emphasis on value), just they do not have any tax basis allocated to them. Generally, for a charitable contribution, except for certain types of appreciated property such as securities, you are allowed to take a deduction for the amount of your basis (generally what you paid) for the item.
In the case of frequent flyer miles and/or flyer awards, since you generally have not paid anything for them (disregarding service fees/delivery fees etc.), you cannot deduct anything if you donate them .
If you wanted to be REALLY AGGRESSIVE, you could say that when you purchased the airline tickets on which you originally earned the miles, you allocated some of the ticket's purchase price to the frequent flyer miles ( @~$.02/mile) (ie for a $500 ticket, you paid $400 for the flight, and $100 for the resulting frequent flyer miles), and then take a deuction for that amount. I wouldn't recommend it.
Cheers
"Neither frequent flyer miles nor awards have any cash value."
Actually, frequent flyer miles and awards have cash value (emphasis on value), just they do not have any tax basis allocated to them. Generally, for a charitable contribution, except for certain types of appreciated property such as securities, you are allowed to take a deduction for the amount of your basis (generally what you paid) for the item.
In the case of frequent flyer miles and/or flyer awards, since you generally have not paid anything for them (disregarding service fees/delivery fees etc.), you cannot deduct anything if you donate them
. If you wanted to be REALLY AGGRESSIVE, you could say that when you purchased the airline tickets on which you originally earned the miles, you allocated some of the ticket's purchase price to the frequent flyer miles ( @~$.02/mile) (ie for a $500 ticket, you paid $400 for the flight, and $100 for the resulting frequent flyer miles), and then take a deuction for that amount. I wouldn't recommend it.
Cheers