Kathy McDonald on tue 19 apr 05
I have often wondered
T...if you hire people to do non pottery related tasks to
free you up to make pots those are legitimate costs of production right?
So if I donate a piece and I paid someone to clean my studio
while I made the piece thats a legit cost of production ??
Potters are asked to donate to LOTS of
causes, fundraisers, and miscellaneous charities.
I just finished doing my income tax from last year and I
was astounded to see that I had donated well over
2000 dollars (retail) to various charities .
This does not even count the door prizes at small cfaft fairs
and music festivals, or to donations to socials and chinese auctions
at various community events.
if the local Coke bottling plant donates a jacket or merchandise to that
same
event...i bet they get a much better deal from Revenue Canada than I do.
Bet the local law firm does too!!!!
Companies have much more freedom than individual artists to write these off.
They expense out labor and clerical tasks..but it's very different for a
small
one person studio to do the same.
Revenue Canada is much more likely to audit me if they see a bill for
1000 worth of cleaning expenses than they are to audit a lawyer for a
similiar amount
of clerical or janitorial services. It's just NOT a level playing field.
Just my 2 cents!!!
Kathy
Paul Lewing wrote:
>on 4/17/05 9:13 AM, Steve Slatin at claystevslat@YAHOO.COM wrote:
>
>
>
>>John --
>>
>>Under current tax law, you may deduct the cost to you
>>of the thing you donate, or its fair market price,
>>whichever is lower.
>>
>>
>
>Which means that if you deducted those costs when you bought the materials,
>you get NOTHING for donating your work. You can't deduct those costs
twice.
>Does that seem fair?
>Paul Lewing, Seattle
>
>___________________________________________________________________________
___
>
>
Paul, if one is incorporated - Schedule C or Sub-S - and receives a
paycheck from the corporation, then by proper accounting there should be
for the corporation a Cost of Goods Sold that includes labor. That cost
- which includes the labor - can be deducted. But you still cannot
deduct even the full wholesale price, much less the full retail price.
You can only deduct what it cost to make it - including the labor in the
case for the corporation.
One is not permitted to take a deduction for the profits donated - the
difference between the stated sale price and the cost of goods sold -
that one hasn't actually earned.
Regards,
John Rodgers
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