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The Magic Cafe Forum Index » » Tricky business » » Donating a show (0 Likes) Printer Friendly Version

shawn popp
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Denver
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I am looking for some information regarding donating a magic show. For the last several years I have donated my time and performed for the Make a wish foundation. I would like to use this as a write off (which I've never done) but I'm not sure how to go about it. I've been told the services cannot be used as a write-off, only goods and actual money donations. Any advice?

shawn
MAGICBYTIM
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Louisiana
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This is a common myth about written off shows. I am not a CPA but I have discussed this with my CPA on several occasions. You may want to do the same. I have organizations calling me to do free shows and telling me that I can write it off. This is not true. You can not write off time. If you donated tangible items you could but not time.

The way it would work is like this. Suppose you get $100 for a show. You go and perform the show and write it off. You would have to claim the $100 as income then write off the $100 as a donation. This would be a net wash. If audited you would have to prove the donation. Some organizations will give you a letter saying that you donated $100 without giving them money. This is not legal. Most organizations do not know this.

An example of this is donating a car to a organization. You can only write off fair market value of the car. Most organization would give you a flat number for the donation. Now they are required to provide a blue book value on the car for the write off.

There will be different opinions on this but this is what my CPA said. If someone can prove this different let us know.

Tim
LeeDillingham
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Las Vegas
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As a business, you can write every dime that you spend related to the business. This applies, if your business spends $100 on mouth coils or a donation to the Boy Scouts. To the IRS, there is no difference. The only difference is which line number on the tax form. As metioned above, there is no write off for your time.
shawn popp
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Denver
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So is there any way around it. Loophole?
muzicman
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LaCenter, Wa
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Have money actually change hands, with a paper trail, even if it's a wash. In some cases, you may want to give more than you recieved. Afterall, it IS a donation.
nucinud
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New York, New York
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If they give you a check for the show and write them a check back as a donation, it is not a complete wash. I believe the tax rate is not the same for income as it is for donations. So I would check with your tax accountatnt to see what is better for you.
"We are what we pretend to be" Kurt Vonnegut, jr.



Now U C It Now U Don't

Harry Mandel

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shawn popp
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Denver
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Thanks for the info and advice.

best
shawn
Skip Way
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Is this a great time to refer Steve Snyder or WHAT? Steve is known as The Tax Magician. He's written an EXCELLENT book on taxes for magicians. visit his website at http://www.thetaxmagician.com
How you leave others feeling after an Experience with you becomes your Trademark.

Magic Youth Raleigh - RaleighMagicClub.org
cgscpa
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Ashton, MD
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Quote:
On 2006-09-21 13:32, MAGICBYTIM wrote:
This is a common myth about written off shows. I am not a CPA but I have discussed this with my CPA on several occasions. You may want to do the same. I have organizations calling me to do free shows and telling me that I can write it off. This is not true. You can not write off time. If you donated tangible items you could but not time.

The way it would work is like this. Suppose you get $100 for a show. You go and perform the show and write it off. You would have to claim the $100 as income then write off the $100 as a donation. This would be a net wash. If audited you would have to prove the donation. Some organizations will give you a letter saying that you donated $100 without giving them money. This is not legal. Most organizations do not know this.

An example of this is donating a car to a organization. You can only write off fair market value of the car. Most organization would give you a flat number for the donation. Now they are required to provide a blue book value on the car for the write off.

There will be different opinions on this but this is what my CPA said. If someone can prove this different let us know.

Tim


I am a CPA and Tim's description above is correct and well explained. This questions comes up quite a bit in my practice where professionals donate their time expecting a write off. They are a bit disappointed when I tell them their is no deduction for their time.

I would suggest NOT exchanging funds. The contribution is generally only deductible if you itemize your deductions so it would not not be a wash unless you itemize. Futhermore, you could end up paying social security taxes on the "income" you receive even if you turn around and write a check back as a donation. This is what nicinud may have been referring to above.

See your tax advisor for further information. Smile
Lyndel
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wrote the theme to the TV show COPS!
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I also recommend this reference: http://www.fredbecker.com/tax_advice.htm


Lyndel
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