American Airlines donation of my travel miles--and they valued the donation. How do I list this donation on my taxes?

[tori30s]

I gave about 150,000 American Airlines travel rewards miles to the Charity of "For All who serve" (service men's charity).  They gave me the value of the miles I donated.  How do I list this donation?

[JulieH1 · Accepted solution]

When I first saw your question, I immediately typed how to enter a charitable donation but decided to research it first.  I am a tax attorney but have not had this issue before.  I was so surprised by the answer.

The IRS recognizes the donation of airline miles or points as a gift from the airline to the charitable organization. Therefore, miles donated to the Red Cross are not considered tax-deductable by the individual donor. For further information, consult IRS Publication 526 and/or your personal tax advisor.

You can’t take a charitable contribution for frequent flyer miles because you’ve gotten them for free. You had no cost associated with them. And, although they might have substantial value (sometimes, as much as $5,000 or more worth of travel each year), the IRS has not required you to pay tax on the free miles you earn each year. And we do want to keep it this way, yes?

Now, there may be one option that  is  deductible.

Sometimes, people pay for their frequent flyer miles. If you have paid for those miles, you can deduct your cost as the value of your donation.