Re: [GNC] Non-cash charity contributions
The miserable Revenue in Ireland, where I tax reside, used to have the same but they restrict in now On 24/11/2019 18:58, Art Chimes wrote: In the US at least, many donations of stuff — other than money — to charities is tax-deductible. ___ 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.
Re: [GNC] Non-cash charity contributions
On 2019-11-24 14:16, Wm via gnucash-user wrote: > 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. No, I don't think "instead of" is right. It is a tax issue (which the OP didn't ask about, but several of us have addressed it anyway) and an accounting issue, both. It is unfortunately true that computations of tax do not always use the same rules as ordinary accounting. > 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. And as I mentioned, in the US -- remember that the OP asked specifically about the US -- there are special rules for inventory. However, from the general tone of the OP's question it doesn't seem that he's looking to donate goods that he originally purchased with the intention of reselling them. > 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. Emphatically, no. I don't know how it is in other countries, but in the US, a long time ago, our Supreme Court made a distinction between tax avoidance (legal) and tax evasion (illegal). Tax avoidance is arranging your affairs so as to minimize your tax liability. Making a charitable gift in order to alter your tax situation is 100% legal tax avoidance, at least in the US. > 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] Giving something "to a poor person" is not a charitable donation under US law: the IRS Web page I already cited says that gifts to individuals are not deductible donations. Giving that same can of tomatoes to a soup kitchen or similar _is_ a charitable donation. Or more specifically, it is if the soup kitchen is registered as a charity. -- Regards, Stan Brown Tompkins County, New York, USA https://BrownMath.com http://OakRoadSystems.com ___ 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.
Re: [GNC] Non-cash charity contributions
Art, Kevin Any donation to charity would be recorded if it is tax deductible against an expense account on one end of the transaction and against an asset or liability account on the other. If you use an income account then your expense is offset against that specific income and you get no nett tax benefit unless you made the income account non-taxable i.e. income not reportable for tax purposes, however the items donated are items you have already purchased so they are assets. You could create an pooled asset account for MiscellaneousHousehold assets and give it some nominal value. E.g. If you have contents insurance on your house, that might serve as a nominal value. Assigning the nominal value could be an opening balance against equity. You could then increase the asset any time you made a purchase of capital goods for the household and use it as the target account for the other side of the donation transaction to decrease the pooled assets. It involves some tracking of assets but not on an individual basis. David Cousens - David Cousens -- Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html ___ 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.
Re: [GNC] Non-cash charity contributions
On 24/11/2019 18:26, Kevin Reid wrote: On Sun, Nov 24, 2019 at 10:14 AM Art Chimes 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.
Re: [GNC] Non-cash charity contributions
On 2019-11-24 12:58, Art Chimes wrote: > In the US at least, many donations of stuff — other than money — to > charities is tax-deductible. ...> My question is, how best to record these in > Gnucash. > > 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. > > As a placeholder, I am using "Orphan-USD" as the source. Is there a > better way. I should say so! "Orphan" isn't meant to be a permanent repository of any transactions, as far as I'm aware. > 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. Good news! Your purchase price is irrelevant, and depreciation is irrelevant, so you have no need to keep track of either. The US IRS says: "you generally can deduct the fair market value of any other property you donate to qualified organizations" Source: https://www.irs.gov/taxtopics/tc506 Note: fair market value. Not cost, not cost net of depreciation. Fair market value. (There's one caveat, on the same web page: "Special rules apply to donations of certain types of property such as automobiles, inventory and investments that have appreciated in value. For more information, refer to Publication 526, Charitable Contributions." But your examples don't sound like these types of things.) The problem, of course, is how to determine fair market value without selling the goods. The recipients will almost certainly not give you a valuation, just a receipt for items, so finding FMV is your problem not theirs. If you're donating books to a library book sale, one way to determine FMV would be to ask what they sell books for -- most likely either per volume, per pound, or per bag. Whichever it is, it will be a tiny fraction of what you paid for the books or what bookstores are charging now. Assuming your canned goods are not near their expiration, not dented or rusty or otherwise unsalable, their FMV is what grocery stores are currently charging. Similarly for hard goods like plumbing supplies, though you should probably make a reduction if they're not in their original packaging, especially if they have been used at all. The usual caveats: I am not a tax professional, and you should check this out yourself rather than relying on what I tell you. As for how to account for these donations, I think Kevin Reid's answer is a good one, and it's what I do: > you could record them as negative expenses — if you donate, say, > food, record them against your expense account for food. This ... > 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. -- Regards, Stan Brown Tompkins County, New York, USA https://BrownMath.com http://OakRoadSystems.com ___ 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.
Re: [GNC] Non-cash charity contributions
If I understand it correctly, such donations are direct reductions of taxable income, thus I’d set up a contra-income account for the other half of the transaction. But by all means, speak to a local CPA about how best to handle this. Regards, Adrien > On Nov 24, 2019 w48d328, at 11:58 AM, Art Chimes wrote: > > In the US at least, many donations of stuff — other than money — to > charities is tax-deductible. This includes furniture to the Salvation Army, > canned goods to a food pantry, books to your public library's annual sale, > plumbing supplies to Habitat for Humanity, etc. > > There are various limitations, but let's assume we're talking about > qualified donations. > > My question is, how best to record these in Gnucash. > > 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. > > As a placeholder, I am using "Orphan-USD" as the source. Is there a better > way. > > 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. > > Thanks, > Art ___ 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.
Re: [GNC] Non-cash charity contributions
On Sun, Nov 24, 2019 at 10:14 AM Art Chimes 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. 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. 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. ___ 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.
[GNC] Non-cash charity contributions
In the US at least, many donations of stuff — other than money — to charities is tax-deductible. This includes furniture to the Salvation Army, canned goods to a food pantry, books to your public library's annual sale, plumbing supplies to Habitat for Humanity, etc. There are various limitations, but let's assume we're talking about qualified donations. My question is, how best to record these in Gnucash. 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. As a placeholder, I am using "Orphan-USD" as the source. Is there a better way. 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. Thanks, Art ___ 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.
