Quote from: admin

Quote from: Mangelore

Quote from: plbyrdI believe tax exempt entities only have to make annual filings unless they have paid employees, in which case they must make quarterly filings of appropriate payroll taxes.  Since each asset on the books will have a corresponding entry to Donations under the revenue column, then it's not a problem at all to have a valuation of $100,000.

It's interesting to know that if the User Group got audited, it wouldn't need to provide any justification for the value of their donated assets.

I'm pretty certain that wouldn't be the case here.....

Lance

As long as the donations are valuated under $5,000, the in it truly doesn't matter as the IRS guidelines ONLY require an appraisal on donations valued at more than $5,000.

Now what WOULD be suspicious is if Jim formed the non-profit himself, and then transferred his own IP to it and then claimed a tax deduction.  That would most likely draw some scrutiny; but it's still not clear if it would draw anything else as long as it was less than $5,000.

In regards to this thread and the questions of legality of my proposal I have found the following:

I am correct that an author may donate his work to a User Group and take a Tax write-off. As is stated in the listed proposal the Tax laws are subjective. The key point, is the fact that the Donor does not exceed $5k. $5k donations and above must be indepentaly appraised.

I was incorrect when I stated that the User Group could issue a letter of appraisal, based on evaluation criteria. Th IRS considers any non-profit entity of establishing a value on a donated good a conflct of interest. It is up to the donor to establish the value AND if it falls under $5k does not need to be substantiated.

I know this sounds to good to be true but I had two specific incidents happen this past week that corroborates this:

I donated a very large amount of books to the County Library. All that was issued was a receipt for books stating the number and type (i.e. Hardcover, paperback etc.). It is up to me to put a value to it. I chose $200. This is a fair amount and wouldn't even be scrutinized by the IRS. If I were ever audited I would have my receipt stating what I donated and the value I wrote on it.

The second incident came when I was donating my late Mother in Law's car to a charity that accepts them. Again, I had to state the value of the vehicle. I went to the Kelly Blue Book and made a fair appraisal of the car and actually thought it was higher than the car was worth, it stated $800 and I took $500.

This is not at all unlike a software author donating his source to a non-profit organization and taking a nominal tax write-off for his intellectual property. Additionally, based on the above examples. The User Group would simply state what it received with NO $ value. The author then has the onus of justifying the deduction.

One of the MAJOR differences in these scenarios is that when donating software it can be given out more than once (by the UG) unlike the sofa we talked about before and the books and car we talked about in this post.

From what I see, the people who disagree with my proposal are all outside of the US and may have stricter taxation laws than here in the US.

In the US, what I propose is 100% legal. So when I assign my 3 copyrights to a User Group, I can take a $1K deduction and will not be breaking the law or cheating the IRS. If I am ever audited I won't even have to break a sweat because I have a receipt of donation and the $1k value I assigned to my intellectual property is under the $5k limit and low enough to be reasonable to assign 3 copyrights.

I welcome any comments from any US members who may not agree. But since everything I am referring to is based in the US, I find it hard to explain it based on non-US people's tax bureau's.

BTW, obsolescence plays a big role here and the C-128, while not in production anymore is not obsolete. I just found out this week that there is an active effort to develop new hardware to interface with the 128 as well as software initiatives.

Korodny,

I wish I could address your concerns better as I am sure that this explanation will not satisfy your non-belief that this is legal and can be done. I've put a lot of time into this and have not had one accountant tell me that there is anything wrong with the idea. I tried to explain your point and was basically told that the FMV of the SOURCE is subjective and that what I want to deduct for donating it is a pittance (by IRS standards) and would be fine a long as I had a receipt of donation by a non-profit entity.

-Jim

I would like to chime in on this subject...

...but I cant... I have no clue.  But if whatever you guys are thinking up is good for the 128, then Im for it, darn it.

...yeah..... ok, ill go back over there and be quiet...