Discussion:Business as intermediary for charitable contributions
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Discussion Forum Index --> Tax Questions --> Business as intermediary for charitable contributions
| March 18, 2008 | |
| A well-meaning client has started a "business" in which he facilitates contributions to charitable organizations by organizing activities that donors will "sponsor". He collects sponsorship contributions and forwards them (100%)to the charitable organization. The charitable organization sends acknowledgement letters to the sponsors/contributors documenting the contributions for tax purposes. The client has no reportable income from this activity but he incurs expenses: approximately $10,000 in "startup" training and equipment purchases, and $500 in operating expenses per activity.
Does the client have any justification for filing a schedule C and claiming the startup and operating expenses on it? The New Tax Guy | |
PostingFromWork (talk|edits) said: | 18 March 2008 |
| It doesn't sound like a for-profit activity if he isn't trying to get a taste. I vote charitable deduction, if any. Need more details on the various expenses to make a call.
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| 18 March 2008 | |
| "The client has no reportable income from this activity but he incurs expenses" - Does the guy have a profit motive or is he doing this as a do-gooder activity? If no profit motive, it is not a business. | |
| 18 March 2008 | |
| He sounds like a volunteer for each of these charitable organizations. He gets nothing for facilitating and organizing events, and simply collects the money and turns it in to the organizations.
I've spent quite a few years working in non-profit world, and he sounds like the job we used to recruit chapter coordinators for. They were volunteers and normally turned in the receipts for all of their purchases for the event to be reimbursed, but I would agree he doesn't sound like he's set up with the intent of being a business. | |
| 19 March 2008 | |
| how about future assignments? if he is wanting to consult (actually bringing in some income) down the road, he may be able to start up a 501c3 org, deduct expenses, etc.
if not, he could have the charity write a letter of thanks for his donation of equipment, startup costs IF the equipment and such was actually donated. from your wording, it sounds like there are multiple charities involved though? | |
| March 19, 2008 | |
| The startup equipment and supplies are not being donated. They are one-time purchases intended to be reused for future fundraising events.
Yes there are multiple charities involved. And so far each activity that has taken place or that is planned is for the benefit of a different charity. | |
