Discussion:Question about a practice group and deductions....
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New Note Finder (talk|edits) said: | 26 August 2007 |
| Ok, here is the scenario: There is a research university and a related faculty practice group. These are separate entities with separate tax ID numbers--both are 501(c)3s. If you are a faculty member you are considered a member of the faculty practice group. If a faculty member chooses to practice in his or her field outside the classroom setting, the gross money generated goes into the practice plan. The practice group negotiates contracts, bills customers, and handles collections. Of the gross amount generated, fixed percentages go into an administrative fund, a deans fund, and a department fund--the residual amount is remitted to the research university and is then distributed to the participating faculty member as extra pay.
Here is my question, can the faculty members take either a charitable deduction or business expense deduction for the portions out of the gross income they generate that goes into the various funds? I've researched over a dozen PLRs related to practice groups but have hit a brick wall. I've also read IRC 162 and IRC 170 to no avail. Anyone have any thoughts? | |
TheTinCook (talk|edits) said: | 26 August 2007 |
| No, you can't take a charitable deduction for the value of your time. | |
New Note Finder (talk|edits) said: | 26 August 2007 |
| Ok, but I guess their argument is that had they not been in the practice group they would have gotten the entire amount--instead, their amount is reduced by portions going to the administrative fund, deans fund, and department fund. | |
AugustaCPA (talk|edits) said: | 27 August 2007 |
| This is a good question--I'm curious to know the answer as well. | |
| 27 August 2007 | |
| Maybe I am misunderstanding things but I think they are already receiving the benefit of the deduction.
$1000 Gross revenues generated (100) Admin fund (100) Dean's fund (100) Department fund $700 To professor via university conduit. Didn't they get the deduction they are looking for? | |
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