1539
hmm (s3.us-west-000.backblazeb2.com)
submitted 8 months ago by to c/politicalmemes@lemmy.world
108 comments fedilink hide all child comments
 

https://thecanadian.social/@MostlyHarmless/116157805037426573

you are viewing a single comment's thread
view the rest of the comments
[–] 8 points 8 months ago* (9 children)

Right because you're donating intellectual property which is property. And that distinction is fucking nonsense but here we are. I doubt a full audit would allow market prices to survive on that though. They'd be like "hey now, this didn't cost you that." But to do a full audit we'd actually have to fund the IRS. Good luck getting that to happen.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 9 child comments
    •
  • [–] 2 points 8 months ago (8 children)

    They’d be like “hey now, this didn’t cost you that.”

    But would not that depend on how OP's time is valued in this case? OP could argue that their expertise costs $14000/hour ($70000 over 5 hours). I am sure that they would argue the hour cost, I have not clue how the IRS handles something like this.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 8 child comments
    •
  • [–] 3 points 8 months ago* (5 children)

    They don't let you deduct the cost of your own labor ever. The property thing is the loophole (but after further research not a real loophole and they will nail you for it).

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 5 child comments
    •
  • [–] 1 point 8 months ago (4 children)

    They don’t let you deduct the cost of your own labor ever.

    Yes, but ... if you use your own labor to create a product, and then donate the product, you can deduct the value of the product.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 4 child comments
    •
  • [–] 1 point 8 months ago* (3 children)

    But my point is technically you can deduct the cost of the product. Lets say you knitted an Afghan that you can sell on Etsy and donated it to someone. You can only technically deduct the cost of the yarn, but you're getting away with doing the market value thing. Full audit would nail you for it but the IRS isn't staffed enough to call you in for one of those.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 3 child comments
    •
  • [–] 2 points 8 months ago (2 children)

    Would the IRS have a problem with writing of the value of the yarn or the "market value" of the product?

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 2 child comments
    •
  • [–] 2 points 8 months ago (1 child)

    The value of the yarn is deductible if you make the product. If you sell the product to someone they can deduct the full value if they donate it while you pay income taxes on the profit. Trying to backdoor your labor as a deduction is what the IRS has a problem with because you're not allowed to do that.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 2 points 8 months ago (1 child)

    As I understand it, technically the "thing of value" is the script itself - because it doesn't have a clearly defined value you can get away with claiming some fairly crazy valuations.

    There's a very similar tax loophole popular with the wealthy where you get a "great deal" on some slightly valuable art, donate it to charity, get it valued by an "expert" you know, who just happens to think it's worth many times what you paid, then write that off on your taxes. Basically free money.

  • permalink
  • fedilink
  • source
  • parent
  • hideshow 1 child comment
    •
  • [–] 1 point 8 months ago

    Do you know if this expert has to have some kind of credentials? Or could John Smith start a non-profit, Jenny Smithy have James Smithens who is an "expert" say the value (of some object) is more than Jenny owns, have Jenny donate this object to John's non-profit and then tax $0?

    (I know it technically can be done, but do you know if there is some threshold were it will be flagged? Writing of more than you own would be a flag and call for an audit but what about something worth $1000?)

  • permalink
  • fedilink
  • source
  • parent