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how do one handle donations. - now, respecting bonnie's mention...

updated sun 15 aug 04


pdp1@EARTHLINK.NET on sat 14 aug 04

Hi Bonnie,


----- Original Message -----
From: "Jeremy/Bonnie Hellman"

> Hi Phil and other clayarters,
> We've been through this before.... if you sell your work
at whatever price,
> this is income to you.

Yes, or, no, or it depends, but generally, that is the
consensus...too, there are ambiguities sometimes...

Income may also be one's recieving goods or services in
exchange for one's "Pots" or one's Work, or one's goods or
services, yes?

>If you buy someone else's pot, perhaps it is a
> business expense (advertising for your business when your
name appears in
> the program or purchased as a pot you need to study to
improve your own
> work?), but maybe not.

Yes, maybe, or maybe not, and or, if you buy or trade
something for some one else's
something, and, donate that something a charity, it may or
may not be a
deductable expense for your having bought and donated
it...but when it is, it is...

One can also donate someone else's services for which one
has paid, yes?
And have a charitable deduction for it...

> If it is a business deduction, and you deduct it on
> your US tax return, then the net on your business tax
return is zero, and
> you're no better off and possibly no worse off (unless you
live in an area
> with a gross receipts tax, in which case you end up out of
pocket as you
> remit that gross receipts tax to your local taxing
authority. If you deduct
> the purchase of the other pot, you have already written
off the cost and
> cannot claim it a second time, when you donate it.

It may or may not be a 'business' deduction...or would
depend on whether one is in business or not, or the kind of
business it is, for the kind of
deduction it is, but, broadly, we are talking about
deductions to charity, whether from a business as such, or
not...and maybe we are talking also about business
deductions as relate to the cost of doing business or
advertiseing or promotion and so on...

Too, it depens on what one paid for the "Pot" could
buy a very valuable Pot in an occasion of an unexpected
bargain at a garage sale or t hrift store, and, getting it
appraised, find it to have an
authenticated high value which may be verified. One could
donate this Pot to a charity, and what you paid for it is
then kind of moot. The value of the donation would be the
appraised value, and that value would not be a
capital gains, or other liability, would it?

Too, some of this may depend for it's utility, on one's tax
bracket, would it not?...and or if one finds
advantage in lowering the net profits, enough
to get into the next
lower bracket, or if that is worthwhile... is a game of puzzles, no?

...seems so to me...

> If you don't deduct the pot you "buy" as a business
expense and plan to
> deduct it as a charitable contribution, that appears not
on your business
> tax return, but as an itemized deduction on Schedule A (if
you have enough
> deductions to exceed the standard deduction), possibly
subject to certain
> limits, if family income is high enough. Even if you can
deduct the full
> cost on your Schedule A, you have included additional
income, probably
> subject to some self-employment tax.


> The final word is that this is NOT a way around your not
being able to take
> a deduction for the retail price of donations of ceramic
pieces you make. It
> just can't be done legally.

I never said anything about 'retail' in any way whatsoever.


It would be and is, entirely 'legal' to buy someone else's
Pot, and to
donate it to a charity, and to recieve from that charity a
receipt as indicates the value they assign to it, or to use
some method as would be accepted as to what the value of the
pot or other item is, and, to
deduct that value as a charitible contribution, or as one is
entitled to do, anyway.

If two Artists buy eachothers work and do this, it is
entirely legal.

Now, how much of what kind of advantage they may find, and
inwhat way, is a
different question.

When rich patrons donate Art to charities, when rich rock
stars donate a guitar or a tee-shirt or whatever, it is not
Art or items they as individuals have made, is it?


They get full 'fair' market value for their donation too, do
they not?

A tee shirt may be 'worth' five thousand dollars, and they
will get that much of a 'deduction' do they not?

Yes, they do...

> You never get to deduct the value of your time. You only
get to deduct the
> cost of materials that went into the piece you donated,
and presumably you
> have already deducted those.

You get to deduct the value which is accepted or assigned to
the thing in question accoding to the reasoning or logic or
appraisal or aggreements as concern the value which the
thinhg is deomonstrated to have.

If a wealthy patron donates a Picasso to a charity, he or
she does not tend to merely 'deduct' the value of the
materials it is made of, but the value assigned to it by
some other criteria, such as appraisals or the sale price in
the actual charity auction or something as gets negotiated
between his or her representatives and the irs.


Yes, but you may deduct the value of someone else's "time"
when you have paid them for it, for something as is a
deduction, an expense, or for something as is to be placed
in an
depreciation schedule...or something one is to donate to a

Hence, my initial quip...

Let it be someone else's "time" and you may deduct it 'as'
are entitled to do according to how you are entitled to do

The rest of which subsequent to or ancillary to that, is
itself a worthy topic, but not yet THE
topic necessarily, or, we best get this in the operatively
useful order lest we become, or remain, confused...

> So, Phil, you may want to stop advising people to do this,
since it is not
> legal and never has been.

Bonnie, I did not "advise" anyone to do anything!

I was, and am, thinking 'out loud' TO enjoy doing so, and to
enjoy a

And, I will argue with you till the Cows come home that it
is certainly and entirely "legal" to buy someone's Work, and
to donate to to a
Charity, and to take the deduction to which one is entitled
for having done so. Or to buy someone's Work as a business
expense, and when appropriate, to enjoy the deduction or
depreciation allowance for that Work, to which one is

And that it is entirely legal for two parties to buy one
another's Work, and to donate said Work to some charity and
to take the deduction to which they are entitled for having
done so.

Or, to buy one another's Work where to do so is a business
expense, and, where appropriate, to depreciate it on a
schedule or deduct it as may be according to the code
particulars as regard it...

What is the confusion here????

I think you did not understand what I was saying...!

> Bonnie
> Bonnie Hellman, CPA in PA & CO

Best wishes!

Hugs and play...

el ve