- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
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 10:15 am to hungryone
quote:Individual.
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
Posted on 7/11/19 at 2:17 pm to LSUFanHouston
quote:Pretty close, as in we know the founder/exec director. But I don't think they can/will handle the shirt sales. Multiple teams for the 5k create/sell shirts and donate the proceeds.
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?
We have asked other teams and they say they don't report it, but I would rather go by the book if at all possible and have us covered.
Posted on 7/11/19 at 2:32 pm to PJinAtl
quote:
We have asked other teams and they say they don't report it, but I would rather go by the book if at all possible and have us covered.
If you were audited and you do everything else right, I doubt theyd even hit you with an assessment on that money. I'm telling you it's not worth adding schedules and self employment income to your return over this.
Posted on 7/11/19 at 4:53 pm to PJinAtl
quote:
but I would rather go by the book if at all possible and have us covered.
I can appreciate that.
When the IRS does a "bend you over" audit, which is very rare these days, they are looking for unexplained and unreported large cash deposits. This is not what they are looking for.
Look, sometimes my kids play on teams, and some mom makes team shirts and we all give her $10 for it. I doubt that she's reporting that.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News