Topic: Building design Suite Premium from Autodesk $2,050

[snownut2]

Well the AutoCAD 2014 has closed, hopefully someone here took advantage of the auction..

[snownut2]

No bidders on the Building Design Suite yet, closes tonight @ 10:14 EST...

Link in post #1 is still good.

[Keith™]

...  I am sure claiming the value of the software donation in their tax filings.

Actually, that would be unlawful ... you can't deduct the retail cost of a product donated to charity unless that retail cost is what you actually paid for it. Using that logic, I could make a widget for $10 and then claim that widget is worth $5000 and give it to charity for a nice $5000 tax deduction .. sorry, it doesn't work that way.

Also, claiming the value "given" to the university as a charitable deduction when receiving something of value in return is unlawful. The IRS treats such transactions as a purchase, and while you may deduct the purchase price of the license, generally it must be capitalized. In fact, there is another IRS provision that essentially says that if you acquire a product for use for a significant discount than would normally be available to others, the value of the added benefit is a taxable event. Thus, if you purchase a product for $1200 and that product retails for $4000, you could quite possibly be left on the hook for taxes on the added value of $2800.

The IRS is an evil organization designed to separate you from your money and everyone should beware.

[snownut2]

Also, claiming the value "given" to the university

NHPTV (a separate entity from UNH)  is a non-profit (as stated in reply #2) 501c3 corp, that has complete ability to issue tax deductible donation forms to donors, for both cash and product/asset donations. (completely lawful)

[Keith™]

It certainly is legal for the 501c to give a receipt for the donation, and if is legal to deduct the donation, but only to the extent it exceeds something of value received in return.

You might want to read more irs regulations

[mjfarrell]

You might want to read more irs regulations

You might also rather have a hot poker in the eye

or roll in a bed of cholla cacti

Or stomp on broken glass and go swimming with Carcharodon carcharias

[snownut2]

You might want to read more irs regulations

I'd rather read this....http://www.theswamp.org/index.php?topic=7169.msg519745#msg519745

[Keith™]

Oh noes... Not the book!!!!!!!

[cadtag]

...  I am sure claiming the value of the software donation in their tax filings.

Actually, that would be unlawful ... you can't deduct the retail cost of a product donated to charity unless that retail cost is what you actually paid for it. Using that logic, I could make a widget for $10 and then claim that widget is worth $5000 and give it to charity for a nice $5000 tax deduction .. sorry, it doesn't work that way.

Also, claiming the value "given" to the university as a charitable deduction when receiving something of value in return is unlawful. The IRS treats such transactions as a purchase, and while you may deduct the purchase price of the license, generally it must be capitalized. In fact, there is another IRS provision that essentially says that if you acquire a product for use for a significant discount than would normally be available to others, the value of the added benefit is a taxable event. Thus, if you purchase a product for $1200 and that product retails for $4000, you could quite possibly be left on the hook for taxes on the added value of $2800.

The IRS is an evil organization designed to separate you from your money and everyone should beware.

If these are NFR licenses, then a case could be made that the full amount is a tax deductible donation.  Since a Not For Resale license can't be bought, and can't be sold, and can't be used for commercial work, then it would seem there's no monetary value to the software license, hence any thing paid by the auction winner ought to be counted in full as a donation to the 501c3.

2015 eula:
If Autodesk identifies the License Type as a “demonstration”, “evaluation”, “trial,” “not for resale” or “NFR” version (each, an “Evaluation License”) in the applicable License Identification, Licensee may Install a copy of the specific release of the Licensed Materials designated in the applicable License Identification on one (1) Computer, subject to certain functional limitations described in Section 6.3 (Affected Data), on a Stand-alone Basis, and permit Access to such copy of the Licensed Materials, solely by Licensee’s Personnel, solely for Evaluation Purposes, only so long as the maximum number of concurrent Authorized Users does not exceed one (1), and only from Licensee’s work location.  An Evaluation License is for a fixed term specified in the applicable License Identification, or if no such term is specified, the term is thirty (30) days from Installation or as otherwise authorized in writing by Autodesk.

consult a competent tax professional

>>The IRS Wall Street is an evil organization designed to separate you from your money and everyone should beware.

FTFY

[Keith™]

consult a competent tax professional

I am a competent tax professional ... I have been a paid tax preparer for at least 30 years.

IRS Publication 17 states:

If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive.

and an example

At a fundraising auction conducted by a charity, you pay $600 for a week's stay at a beach house. The amount you pay is no more than the fair rental value. You have not made a deductible charitable contribution.

The same publication goes on later to state:

A qualified organization must give you a written statement if you make a payment of more than $75 that is partly a contribution and partly for goods or services. The statement must say that you can deduct only the amount of your payment that is more than the value of the goods or services you received. It must also give you a good faith estimate of the value of those goods or services.

To be fair, you might be able to argue the point that the license has no value as it cannot be used commercially and/or may be limited to a 30 day trial period, of which are available to anyone with an internet connection at no cost. However, I think the IRS would probably disallow that because Autodesk specifically values the product at full retail when the item is being auctioned. (see images above)

Turbo Tax has a nice writeup about the misconceptions about what is deductible and how people find themselves not being able to take deductions they thought they were entitled to.

Also see this PDF about IRS rules and regulations .. specifically the "Quid Pro Quo" section.

[snownut2]

Keith, none of the discussion considered this;

Auction winner donates funds to the Non-profit, and receives a certificate saying they won the auction.
Winner then redeems the certificate to the organization that gives the item to them.

The item won in the auction is never owned or in the hands of the Non-profit.
The organization giving away the item receives nothing material from the winning bidder or non-profit. (since they didn't give the non-profit anything)

No quid-pro-quo because the winning bidder is dealing with two independent entities, one being the Non-profit, the other being the donating entity.

[Keith™]

Keith, none of the discussion considered this;

Auction winner donates funds to the Non-profit, and receives a certificate saying they won the auction.
Winner then redeems the certificate to the organization that gives the item to them.

The item won in the auction is never owned or in the hands of the Non-profit.
The organization giving away the item receives nothing material from the winning bidder or non-profit. (since they didn't give the non-profit anything)

No quid-pro-quo because the winning bidder is dealing with two independent entities, one being the Non-profit, the other being the donating entity.

mmmm okey dokey ...

If you think that will fly, then I wouldn't want to be in your shoes when the IRS audits.

The "certificate" still has an inherent value that is equal to the product being auctioned. In fact, in IRS publication 526, it specifically addresses third party donations and the fact that the auction price is not deductible because the winner of the auction did not pay more than the fair market value of the item being auctioned. The damning bit is that the receipt of the item is dependent upon the person paying for the right to obtain it.

You and others can choose to be wrong if you like, but you don't have to believe me or the IRS, you can simply deduct your "donation" and then pray the IRS doesn't audit you and disallow your deduction.

Using your analogy, you could pay a pimp for the right to have sex with a hooker and that makes it ok (wife and girlfriend objections notwithstanding) ... I can hear it now ...

"But officer I didn't pay her for sex, I paid this other guy for a certificate that is redeemable for sex."

You and the hooker are still going to jail.

[dgorsman]

Somehow, I don't think that analogy is getting into *any* tax guide.  No matter how apt.   

[Keith™]

yeah, I don't think hooker expenses are tax deductible, but apparently augmentation costs are under certain circumstances.

[mjfarrell]

yeah, I don't think hooker expenses are tax deductible, but apparently augmentation costs are under certain circumstances.

could they not qualify; as GIFTS? or perhaps ENTERTAINMENT?

considering the invoice was crafted skilfully?