On 24/11/2019 18:26, Kevin Reid wrote:
On Sun, Nov 24, 2019 at 10:14 AM Art Chimes <artsonl...@gmail.com> wrote:
I have an expense account called "charity:non-cash contributions" where I
record these (potentally tax-deductible) donations, but I don't know how
best to record the other side of the transaction.
…
Note: I do not want to be tracking the purchase cost of every item I
donate, and don't want to muck about in the pond of depreciation either.
But I can't imagine I'm the only person who has wondered about this.
Since you are not tracking the items as assets, their value must be counted
as income or expense, as part of the donation transaction.
Heh, don't know if you've been contributing a lot Kevin but you are way
ahead of Art in working this out. The answer is, of course, that this
is a local and national tax issue rather than an accounting issue.
You could record them as income, because you are bringing something into
your accounting that wasn't already there. Or, you could record them as
negative expenses — if you donate, say, food, record them against your
expense account for food. This second option seems reasonable to me because
the sum of your expense account will then more closely track the amount of
food you purchased for your own use, excluding the donated food.
I buy a can of tomatoes
is that an expense or an increase in assets?
I suggest an expense for most people unless you are buying crates of
the stuff for trade, etc.
I gift that same can of tomatoes to a charitable organization
was it an asset in the first place? probably not
If I have given the gift *in order* to alter my tax profile i think
the tax lady would say you were a naughty person.
If I have gifted the can of toms in the same way that I would have
eaten them (I bought two cans and gave one to a poor person) then it
shouldn't be recorded at all [1]
[1] accounting presumes some ordinary consumption after all
You should make your own choice based on what seems useful to you — which
balances you want to be able to see easily. Either will work and either is
an improvement on leaving things in the Orphan account.
Leaving it in the Orphan is lazy thinking.
--
Wm
_______________________________________________
gnucash-user mailing list
gnucash-user@gnucash.org
To update your subscription preferences or to unsubscribe:
https://lists.gnucash.org/mailman/listinfo/gnucash-user
If you are using Nabble or Gmane, please see
https://wiki.gnucash.org/wiki/Mailing_Lists for more information.
-----
Please remember to CC this list on all your replies.
You can do this by using Reply-To-List or Reply-All.
