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Reporting proceeds to donate to charity on 1040
Posted on 7/11/19 at 8:10 am
Posted on 7/11/19 at 8:10 am
This may be a crazy question, but I haven't been able to find an answer on Google, or maybe I'm not phrasing my search correctly.
My family is creating a team for a 5k that benefits a 501(c)3 organization in November. We are wanting to have team shirts made that we sell, and then donate the proceeds from the shirt sale to the organization.
Say we buy the shirts at $5 each and sell them at $15. If we sell 100 shirts, we will take in $1500 and donate $1000 to the organization.
I would assume we could include the $1000 donation in our charitable giving deductions, but how do we handle the income part of it? We can't just act like we didn't take this money in. However, we aren't making anything, because we are covering the cost of the shirts, and donating the rest.
How would we account for that, and how would we show it on our tax filing. Would it be something like self-employed and showing income minus cost of goods sold?
My family is creating a team for a 5k that benefits a 501(c)3 organization in November. We are wanting to have team shirts made that we sell, and then donate the proceeds from the shirt sale to the organization.
Say we buy the shirts at $5 each and sell them at $15. If we sell 100 shirts, we will take in $1500 and donate $1000 to the organization.
I would assume we could include the $1000 donation in our charitable giving deductions, but how do we handle the income part of it? We can't just act like we didn't take this money in. However, we aren't making anything, because we are covering the cost of the shirts, and donating the rest.
How would we account for that, and how would we show it on our tax filing. Would it be something like self-employed and showing income minus cost of goods sold?
4
Posted on 7/11/19 at 8:33 am to PJinAtl
quote:
My family is creating a team for a 5k that benefits a 501(c)3 organization in November. We are wanting to have team shirts made that we sell, and then donate the proceeds from the shirt sale to the organization.
Say we buy the shirts at $5 each and sell them at $15. If we sell 100 shirts, we will take in $1500 and donate $1000 to the organization.
If these numbers are accurate, quite honestly I just wouldn't worry about it. Make the shirts and give the money to a good cause.
Posted on 7/11/19 at 9:16 am to PJinAtl
Nobody is writing off the $15 they give you for a shirt
Posted on 7/11/19 at 9:34 am to PJinAtl
Are the shirts being purchased and resold by a business or by an individual?
Posted on 7/11/19 at 1:47 pm to PJinAtl
So the "technical" answer is that you have a $1,000 income (and I guess it's SE income) and you have a $1,000 charitable deduction on Schedule A.
But like Mingo said, I'd probably just let it go. The shirt making thing isn't a "business" for you if you are only doing it once and you aren't making anything off of it, after the donation.
You would basically treat the money you received as a gift to you, for lack of a better term. But I'd also pass on taking the charitable deduction.
How close are you to the 501c3? Is there any way the sale of the shirts can be handled directly by them, even if you make them?
But like Mingo said, I'd probably just let it go. The shirt making thing isn't a "business" for you if you are only doing it once and you aren't making anything off of it, after the donation.
You would basically treat the money you received as a gift to you, for lack of a better term. But I'd also pass on taking the charitable deduction.
How close are you to the 501c3? Is there any way the sale of the shirts can be handled directly by them, even if you make them?
This post was edited on 7/11/19 at 1:49 pm
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