not_IOMar 2

hmm

https://lemmy.blahaj.zone/post/39348932

Show threadOwOarchist

I wrote a free spec script for a charity organization, enabling me to write off ~$50k in charitable donations for putting in a few hours of work.

Everyone should be looking for loopholes and ways to prevent the US government from getting their money.

Mar 2 at 10:38pmWeb
Show threadhuppakeeMar 3
I intend to pass the loophole my parents gave me to my children, really grateful for it
Show threadTʜᴇʀᴀᴘʏGⒶʀʏ⁽ᵗʰᵉʸ‘ᵗʰᵉᵐ⁾Mar 3
I asked a CPA about this idea a couple months ago and was told that it doesn’t work that way, and everything I can find on the internet backs that up. Can you provide a source saying otherwise?
Show threadAuroraZzzMar 3
I’m gonna agree with you. If OP gets audited, this will not hold up. OP cannot deduct money for a service that the charity pays nothing for. Only unreimbursed or out of pocket expenses can be deducted this way
Show threadOwOarchistMar 3

If OP gets audited, this will not hold up.

The IRS actually already did look it over. They decided (rather arbitrarily) that the script I donated was worth ~50,000 instead of ~70,000 as I was trying to claim. Definitely not a full audit, but they already reviewed it at some level and it passed muster.

Show thread✺roguetrick✺Mar 3
Right because you’re donating intellectual property which is property. And that distinction is fucking nonsense but here we are.
Show threadcaptcha_incorrectMar 3

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.

Show thread✺roguetrick✺Mar 3
They don’t let you deduct the cost of your own labor ever. The property thing is the loophole.
Show threadOwOarchistMar 4

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.

Show thread✺roguetrick✺Mar 4
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 deduct the cost of the yarn.
Show threadcaptcha_incorrectMar 4
Would the IRS have a problem with writing of the value of the yarn or the “market value” of the product?
Show thread✺roguetrick✺Mar 4
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.
Show threadcaptcha_incorrectMar 4
Got it, thanks!
Show threadxorMar 4

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.

Show thread✺roguetrick✺Mar 4
If you ask me they should only be able to deduct the capital gains rate from that (which they would have to pay and thus be a wash).
Show threadcaptcha_incorrectMar 4

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?)

Show threadOwOarchistMar 3
Other than my tax returns from that year? Not really.
Show threadpetersrMar 3
You sound like every business man ever.
Show threadOwOarchistMar 3
You must learn from your enemy to defeat them.
Show threadayyyMar 3
This has “I….DECLARE……BANKRUPTCY!!!” vibes.