Jeremy/Bonnie Hellman on sat 29 jan 05
In this clayart discussion about recycling clay, several
people have now mentioned taking a tax deduction
for donating used clay.
Since tax time is here for citizens of the USA and Canada,
bear in mind that if a business deducts the cost of clay
when it is purchased (or when it no longer exists in ending
inventory), then you don't get to deduct it a second time if
you donate it to a non-profit organization.
You may feel (as a business owner, as a person) that
you're doing something good, or "the right thing", but
you are not rewarded in the US tax code with a second
tax deduction.
Specifically:
If my ceramics business does NOT have inventory for US
tax purposes, then I get a tax deduction when I buy my clay.
The end use- whether it gets used in pots, lines my pond,
sits in containers in my studio, is given to a local school
or other potters to reclaim, or gets hidden in my supply
closet (as long as it is not used for personal,
non-business purposes)-- the cost of the clay is a
deduction on my tax return. However, I get to deduct it
only once!
If my ceramics business has inventory as part of cost of
goods sold, then I get a US tax deduction (after I've
purchased it), when it no longer remains usable in
ending inventory. (Bear in mind that if the clay is
removed for personal, non-business use, I don't get
a business deduction for the cost.)
For most ceramics people, the cost of clay is a
relatively small part of the cost of making a ceramic
piece. (For most ceramics people, the value of the
artist's TIME is the most expensive component in
the cost of making a ceramic piece.)
May we all use our limited time productively or at
least make meaningful choices about we spent
our time!
Bonnie
Bonnie Hellman, CPA
email: mou10man at frontier.net
Gearing up to prepare US & state tax returns for ceramics people and
others....
wjskw@BELLSOUTH.NET on sat 29 jan 05
Oh Bonnie, you take all the fun out of it...
I much prefer the "Energizer Bunny" style of deduction
(it just keeps going, and going, and ...)
you know the one...deduct it when you buy it, again when you drop it
on your foot while unloading it, when you use it the first time,
when you use it the second time as reclaim, again each time you turn
on the pug mill, and finally when you sell it. Heck, I figure each=20
pound of clay is worth at _least_ seven or eight times it's cost...
that's only fair, isn't it? I mean, the government is paying $400
for a toilet seat, shouldn't clay be worth it's weight in gold?
Thanks for the "real" info!
Wayne Seidl
packing for debtor's prison
-----Original Message-----
From: Clayart [mailto:CLAYART@LSV.CERAMICS.ORG] On Behalf Of
Jeremy/Bonnie Hellman
Sent: Saturday, January 29, 2005 11:07 AM
To: CLAYART@LSV.CERAMICS.ORG
Subject: recycling clay - US tax aspects
In this clayart discussion about recycling clay, several
people have now mentioned taking a tax deduction
for donating used clay.
Since tax time is here for citizens of the USA and Canada,
bear in mind that if a business deducts the cost of clay
when it is purchased (or when it no longer exists in ending
inventory), then you don't get to deduct it a second time if
you donate it to a non-profit organization.
You may feel (as a business owner, as a person) that
you're doing something good, or "the right thing", but
you are not rewarded in the US tax code with a second
tax deduction.
Specifically:
If my ceramics business does NOT have inventory for US
tax purposes, then I get a tax deduction when I buy my clay.
The end use- whether it gets used in pots, lines my pond,
sits in containers in my studio, is given to a local school
or other potters to reclaim, or gets hidden in my supply
closet (as long as it is not used for personal,
non-business purposes)-- the cost of the clay is a
deduction on my tax return. However, I get to deduct it
only once!
If my ceramics business has inventory as part of cost of
goods sold, then I get a US tax deduction (after I've
purchased it), when it no longer remains usable in
ending inventory. (Bear in mind that if the clay is
removed for personal, non-business use, I don't get
a business deduction for the cost.)
For most ceramics people, the cost of clay is a
relatively small part of the cost of making a ceramic
piece. (For most ceramics people, the value of the
artist's TIME is the most expensive component in
the cost of making a ceramic piece.)
May we all use our limited time productively or at
least make meaningful choices about we spent
our time!
Bonnie
Bonnie Hellman, CPA
email: mou10man at frontier.net
Gearing up to prepare US & state tax returns for ceramics people and
others....
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pottery@GARYRFERGUSON.COM on sat 29 jan 05
I'm a little unclear on this one.
It has been my understanding if I donate a piece of art to a charity, I can
only write on the cost of materials (clay, glaze, etc.)
How is this any different than donating the clay directly? Because I didn't
use it to create art?
So if I stick my thumb in a bag of clay and call it art, I can donate it and
write off the cost of the clay? Or if I stack a whole pile of hard clay and
call it a sculpture and then donate that, I can again write off the cost of
the clay?
Note: I'm not planning on doing this if any IRS Agents are monitoring the
list!
:)
Gary Ferguson
http://www.garyrferguson.com
Clay Artist
Nampa, ID 83687
Just Raku Newsletter http://www.justraku.com
Raku Glazes: http://www.rakuglazes.com
Raku Secrets: http://www.rakusecrets.com
Got Raku? http://www.cafepress.com/gotraku
----- Original Message -----
From: "Jeremy/Bonnie Hellman"
To:
Sent: Saturday, January 29, 2005 9:07 AM
Subject: recycling clay - US tax aspects
> In this clayart discussion about recycling clay, several
> people have now mentioned taking a tax deduction
> for donating used clay.
>
> Since tax time is here for citizens of the USA and Canada,
> bear in mind that if a business deducts the cost of clay
> when it is purchased (or when it no longer exists in ending
> inventory), then you don't get to deduct it a second time if
> you donate it to a non-profit organization.
>
> You may feel (as a business owner, as a person) that
> you're doing something good, or "the right thing", but
> you are not rewarded in the US tax code with a second
> tax deduction.
>
> Specifically:
> If my ceramics business does NOT have inventory for US
> tax purposes, then I get a tax deduction when I buy my clay.
> The end use- whether it gets used in pots, lines my pond,
> sits in containers in my studio, is given to a local school
> or other potters to reclaim, or gets hidden in my supply
> closet (as long as it is not used for personal,
> non-business purposes)-- the cost of the clay is a
> deduction on my tax return. However, I get to deduct it
> only once!
>
> If my ceramics business has inventory as part of cost of
> goods sold, then I get a US tax deduction (after I've
> purchased it), when it no longer remains usable in
> ending inventory. (Bear in mind that if the clay is
> removed for personal, non-business use, I don't get
> a business deduction for the cost.)
>
> For most ceramics people, the cost of clay is a
> relatively small part of the cost of making a ceramic
> piece. (For most ceramics people, the value of the
> artist's TIME is the most expensive component in
> the cost of making a ceramic piece.)
>
> May we all use our limited time productively or at
> least make meaningful choices about we spent
> our time!
>
> Bonnie
> Bonnie Hellman, CPA
> email: mou10man at frontier.net
>
> Gearing up to prepare US & state tax returns for ceramics people and
> others....
>
> ______________________________________________________________________________
> Send postings to clayart@lsv.ceramics.org
>
> You may look at the archives for the list or change your subscription
> settings from http://www.ceramics.org/clayart/
>
> Moderator of the list is Mel Jacobson who may be reached at
> melpots@pclink.com.
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