AA has devalued their OWN valuation of AAdvantage Miles.

Discussion in 'American Airlines | AAdvantage' started by boondr, Apr 17, 2014.  |  Print Topic

  1. boondr

    boondr Gold Member

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    I believe they have. Last year when I won the MoTown the Musical Sweepstakes from American Airlines they valued the 100,000 AAdvantage miles at $1990 or 1.99 cents/mile. I have the paperwork and had to pay taxes on it.
    Fast forward to the Fly Like Your Famous Sweepstakes from AAdvantage Shopping, and now the T&C list ARV of 100,000 at $1500 or 1.5 cents/mile.

    That is a ~25% devaluation in one year. Is this what we can expect from the program going forward? Could this be the effect of them trying "devalue" the liabilities on their books?
     
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  2. Pizzaman
    Original Member

    Pizzaman Co-founder

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    It's interesting. I wouldn't expect them to drop it in such drastic fashion as part of some larger business strategy. Maybe they got a bunch of blowback from IRS inquiries from past winners.
     
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  3. newbluesea
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    newbluesea Gold Member

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    Not sure who pays attention to those "valuations" other than the people who win sweepstakes.:)
    Also doubt that they would worry about blowback from the less than half-a-dozen people who win these annually.

    Fact is that with the multiple 2 for 1 transfers US miles ( soon to be AA miles) promos one can could make the case that the $1500 may be too high.
     
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  4. Mapsmith
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    Mapsmith Gold Member

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    Kinda wondering if you adjusted your taxes after they announced that reduction. Seems like your miles lost about $500 in value according to AA. Might be time to file an amended return????
     
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  5. boondr

    boondr Gold Member

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    Working on researching it, I did my taxes in Feb.
     
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  6. MX

    MX Gold Member

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    These T&C must've been written and reflected the values prior to the start date (April 3, 2014), and also prior to the latest devaluation. Thus you can make an argument that the AA valutaions are both not credible, and not reflecting the current situation. Presently one can find tons of Anytime awards that imply valuations under 1 cent/mile.
     
    Last edited: Apr 17, 2014
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  7. newbluesea
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    newbluesea Gold Member

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    All these machinations are all very well but do any one here believes the IRS is going to waste their time trying to determine the miles value based on fares?
    If so suppose they based the 100K as the cost of C class fare to Europe? :rolleyes:

    The OP could even up owing more taxes if they determine the value to be same as buying miles on aa.com.:)
     
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  8. Mapsmith
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    Mapsmith Gold Member

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    However, he did say he had a 1099 and paid taxes. and they have published that an equivalent number of miles were valued at $1500.
     
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  9. zphelj

    zphelj Gold Member

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    I'd like to know of any change in the price of a mile sold to Citibank.
     
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  10. LETTERBOY
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    LETTERBOY Gold Member

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    That would be interesting, but I'd be shocked if any bank or airline would disclose that.
     
  11. zphelj

    zphelj Gold Member

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    No doubt. It would be the only way to get beyond speculation though.
     
  12. KenInEscazu

    KenInEscazu Gold Member

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    True, but if an IRS agent walked in displaying a badge, I doubt that they would be able to say, "That's confidential." LOL
     

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