I'm curious about the economics of this from the buyer's perspective. There's two price points of interest that might be the "break even" point:
a) The cost of the parts
b) a) + some amount where the tax deduction breaks even.
The solution to a) is pretty obvious. Whatever is less than the price of the parts means you "get something for free". The more interesting bit is b).
For discussion, let's say the parts are worth $450 ($300 for wheels, $50 ea for casters, and $50 for the base). It seems that most of us would fall into the 25% tax rate (source), so by taking out the $450 from our income we save $450*25% = $112 in taxes. But if I donate $562 then that's what's deducted. If we assume that we want to break even with the cost after the value of the kit, it looks like the equation is (where "donation" d is the amount above the $450 value of the kit):
(amount of "donation") = (amount saved in taxes)
d = ($450 + d) * 25%
d = $150
So, it looks like if you bid up to $600 you'll be buying at the face value of the kit. If you bid for less then you're getting it for less than the $450 value. But the store kit would cost more than the list value due to sales tax and shipping, plus the income tax on that money. Let's say that it's $36 of sales tax (8%) and $14 of shipping for nice round $500 store cost. This makes the real value of the kit $500 * 125% = $625 of value. The income tax is included here because, in most cases, you wouldn't be able to deduct it.
Therefore, our new break even donation is
d = ($625 + d)*25%
d=$208.33
My conclusion is that for any bid amount up to $833 you will be saving money over what it would cost you to buy the same parts from Parallax directly.
Of course, all this is based on a most basic understanding of how taxes work. Anybody want to check my math?
Edit: Anything above b) would be considered a good will donation to IFM, just like a regular tax deductible donation.
Edit2: Just to be clear, I am not bidding at this time.
That explains a lot, but accountants always seem to come up with a million other factors.
Hmmm. According to that page you can make a cash donation up to 50% of your AGI, and from my understanding of AGI it's some amount less than your income. Even if your AGI is only $10,000 that's $5,000 that you can donate in cash. And for cash donations you don't need an itemized list, only a receipt.
But I agree: an account would be very helpful here.
I wouldn't count on any tax deductions. Those only work if no value was received in exchange for the donation. Receipts for donations to 501c3 tax-exempt charities are very specific about providing nothing in exchange for the donations, so they can be used for tax deduction purposes.
I wouldn't count on any tax deductions. Those only work if no value was received in exchange for the donation. Receipts for donations to 501c3 tax-exempt charities are very specific about providing nothing in exchange for the donations, so they can be used for tax deduction purposes.
-Phil
I was wondering about that. The IRS has this to say (emphasis mine):
If your contribution entitles you to merchandise, goods, or services, including admission to a charity ball, banquet, theatrical performance, or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.
For a contribution of cash, check, or other monetary gift (regardless of amount), you must maintain as a record of the contribution a bank record or a written communication from the qualified organization containing the name of the organization, the date of the contribution, and the amount of the contribution. In addition to deducting your cash contributions, you generally can deduct the fair market value of any other property you donate to qualified organizations. See Publication 561, Determining the Value of Donated Property. For any contribution of $250 or more (including contributions of cash or property), you must obtain and keep in your records a contemporaneous written acknowledgment from the qualified organization indicating the amount of the cash and a description of any property contributed. The acknowledgment must say whether the organization provided any goods or services in exchange for the gift and, if so, must provide a description and a good faith estimate of the value of those goods or services. One document from the qualified organization may satisfy both the written communication requirement for monetary gifts and the contemporaneous written acknowledgment requirement for all contributions of $250 or more.
This is an interesting case where you're not getting anything from the charity, but Parallax. Is this one transaction of goods for a donation? Or is it a donation to a charity and a gift from a company? I don't know, but it definitely seems like a gray area.
I wouldn't count on any tax deductions. Those only work if no value was received in exchange for the donation. Receipts for donations to 501c3 tax-exempt charities are very specific about providing nothing in exchange for the donations, so they can be used for tax deduction purposes.
-Phil
I take it then that PBS has some kind of special arrangement then? It seams like PBS turns into the home shopping network during funding week or what ever they call it and some of those "gifts" are quite nice. I've never seen so much Red Dwarf merchandise before.... not that that's a bad thing...
I take it then that PBS has some kind of special arrangement then? It seams like PBS turns into the home shopping network during funding week or what ever they call it and some of those "gifts" are quite nice. I've never seen so much Red Dwarf merchandise before.... not that that's a bad thing...
I'm not sure PBS itself offers gifts in exchange for donations but local stations certainly do. Here is what New Hampshire Public Radio says about donations:
Is my gift to NHPR tax-deductible?
Yes it is. However, if you chose a thank-you gift (such as a t-shirt or a mug), then you must deduct the fair market value of the thank-you gift from your contribution. For example, let’s say you contributed $100 to NHPR and asked for a NHPR grocery bag. The fair market value of the NHPR grocery bag is $5. You must deduct $5 from your $100 contribution. Therefore, $95 of your contribution is tax-deductible.
So following this example I guess a the difference between the amount of the bid and the value of the robot kit could be considered a tax-deductible donation.
Here's what normally happens every year (for the last three years that I've been involved...)
Many businesses around our area, - donate - no strings attached - some goods or services to IFM (or any other charity for that matter).
In Parallax's case for the last two years running, Ken has been generous enough to donate a Boe-Bot for which Parallax is entitled to a receipt for a charitable donation. The Boe-Bot is then put up for auction at IFM's annual fundraiser (which is actually coming up in about two months). The winning bidder pays the money and gets the Boe-Bot, knowing full well that the money they give is not tax-deductible because they received goods for their money. This results in one legal deduction for the Boe-Bot donor but NO deduction for the winning bidder (because they received value for their money)..
In this case, Parallax is giving YOU a gift of some robot parts because you gave money to a charity (directly). We think that was a nice thing for you to do. In the same way that we give away other *prizes* on our Forums from time to time. What we're giving away here has no cash value, because it's going to be "tossed in the dumpster" anyway.
The charity received a direct cash donation from the winning bidder - they are entitled to a tax deduction for that transaction.
Parallax thinks that was a nice gesture, so we give you a bag of parts - but Parallax cannot claim any sort of tax deduction for giving that to you.
I've been to these fundraisers, and I guarantee you that nobody would give $5 for the "bag of parts" that we're auctioning off - because nobody there has any appreciation for what those parts can do.
YOU ALL on these Forums certainly have an appreciation, and we're just trying to get you to give as much as your willing, to a great charity.
One transaction between you and IFM that you will get a receipt for. Parallax gets nothing, and is willing to ship you some obsolete parts that you may be able to use - no different that any other "contest" here, except that the winner of this contest is the one who ponies up for IFM the most.
All we have done here is that Parallax has allowed you to receive the deduction rather than ourselves.
-MattG
I wouldn't count on any tax deductions. Those only work if no value was received in exchange for the donation. Receipts for donations to 501c3 tax-exempt charities are very specific about providing nothing in exchange for the donations, so they can be used for tax deduction purposes.
-Phil
Good catch here Phil. The school my son attends (chrysalis academy) parents association runs a wine and cheese silent auction each year. You can not get a tax deduction because you received a thing of value. Same goes for raffle tickets. Check with your tax advisor.
better yet does IFM have a paypal or wepay(better as the charity does not get clipped for processing fees, they get paid by the donor so if i gave $10 to the ply-bot for erco fund I would pay $10 plus fee, IFM would get $10) And I could take the deduction legally.
This is why Parallax isn't taking your money/ donation (see my post above) - the person that is willing to donate the most to IFM, will go to the IFM website and donate their money directly, and get a charitable donation receipt. IFM is not giving you anything other than their "Thanks" and a receipt for what you gave them. Parallax doesn't get anything out of your transaction with IFM, on the contrary we think that what the donors do each year is wonderful.
Last year in fact I took my MadeUSA (rc controlled) robot to their fundraiser. He had an upper deck with a pitcher on it labeled "Cash for Food" or something like that - he MADE cash BANK for IFM - especially with the "sweet little ol'ladies" ;-) MadeUSA's going back this year too.
Somebody's entitled to the deduction (just like Parallax gets every year when we donate a Boe-Bot). In this case we're just bystanders watching you all do something nice for a charity - we don't get squat.
Like I mentioned above, Parallax could donate these parts directly to IFM and get a tax-deductible receipt ourselves for doing so. Problem is that nobody that attends the fund-raiser in (up-in-the-sticks) Grass Valley has any idea what that pile of cr*p could be used for :-) The one of you that is willing to donate the most to IFM will be shipped that complementary *pile*. :-)
better yet does IFM have a paypal or wepay(better as the charity does not get clipped for processing fees, they get paid by the donor so if i gave $10 to the ply-bot for erco fund I would pay $10 plus fee, IFM would get $10) And I could take the deduction legally.
My local "Rite-Aid" drug store had an after-Christmas blowout sale on many items, 75% off. I bought two of those piggy bank jars (for the twins) with a digital money counter lid, just $2.50 each. The type with an LCD readout which displays the total value of coins inserted. I thought about buying several more and making some sort of "vote with your money" scenario. Still might get some...
I asked about taxes because the boss said I can make a donation on behalf of the company. The amount went over what we normally donate, and at the end of the year we often are not able to deduct these anyway.
Anyway I made a donation. Any friend of Parallax is a friend of mine, and the cause is worthy. Keep up the good work
1) I love robots.
2) I love lowball bids that increment by a penny.
3) I love Pi. Back in gradeschool I had it memorized to 50 decimal places. Fifty is for chumps these days.
4) I'm irrational
This ain't no particle board or mdf...it's real plywood son... BE BOLD AND STAND UP FOR WHAT YOU BELIEVE IN!
I'm waiting for the snipers to come in at the last minute
IFM is too :thumb:
and Ends @ 12 noon Parallax Standard Time on Monday.
Hmmm...never quoted myself before....
If in fact we do have snipers, we gotta make this fair. Since we don't have a real-time-base to go on here - here's (literally) the "last minute" rules:
The winner will be determined by the time stamp that is the last one in the series of sniping bids that is has a time stamp "11:59" AM. If your time stamp is "12:00", it is by definition too late and does not count (because noon "straight-up" by definition occurred when the clock tripped from 11:59:59 to 12:00:00. oh, and all of this is Parallax Standard Time (PST;)
Now it's also possible that there will be multiple bids occurring in such short order, that what you see on the screen at 11:58 may not be the the "latest/highest" bid because by the time you post your bid to beat out the current bid you see, someone else could post a bid higher than what you based your bid on. So all this simply means that if you see a bid for $5 and you bid $6, but just before you post somebody else bids $7, then obviously $7 takes it, even though your $6 bid came in after the $7. duh.
In reality, I'm just happy that we're way past the $5 stage - you-all rock! :thumb:
-Matt "let's do something crazy for a good cause" G
PS: And oh, BTW, I happened to run into President Sue (and her husband Carl) this morning as a matter of fact...they think you-all rock :thumb:, and it's a no-brainer - you have the highest bid, you go to IFM website and donate, and you get a receipt from a 501c3 charitable organization.
Comments
a) The cost of the parts
b) a) + some amount where the tax deduction breaks even.
The solution to a) is pretty obvious. Whatever is less than the price of the parts means you "get something for free". The more interesting bit is b).
For discussion, let's say the parts are worth $450 ($300 for wheels, $50 ea for casters, and $50 for the base). It seems that most of us would fall into the 25% tax rate (source), so by taking out the $450 from our income we save $450*25% = $112 in taxes. But if I donate $562 then that's what's deducted. If we assume that we want to break even with the cost after the value of the kit, it looks like the equation is (where "donation" d is the amount above the $450 value of the kit):
(amount of "donation") = (amount saved in taxes)
d = ($450 + d) * 25%
d = $150
So, it looks like if you bid up to $600 you'll be buying at the face value of the kit. If you bid for less then you're getting it for less than the $450 value. But the store kit would cost more than the list value due to sales tax and shipping, plus the income tax on that money. Let's say that it's $36 of sales tax (8%) and $14 of shipping for nice round $500 store cost. This makes the real value of the kit $500 * 125% = $625 of value. The income tax is included here because, in most cases, you wouldn't be able to deduct it.
Therefore, our new break even donation is
d = ($625 + d)*25%
d=$208.33
My conclusion is that for any bid amount up to $833 you will be saving money over what it would cost you to buy the same parts from Parallax directly.
Of course, all this is based on a most basic understanding of how taxes work. Anybody want to check my math?
Edit: Anything above b) would be considered a good will donation to IFM, just like a regular tax deductible donation.
Edit2: Just to be clear, I am not bidding at this time.
And I hate casters...
SRLM, did you just bid $833 ?? That's alot of food...
What you're saying is close, I think you would need to compute your AGI to know how much of a break you're getting.
You also need to be itemized, and often we have had issues with limits.
http://taxes.about.com/od/deductionscredits/a/CharityDonation.htm
That explains a lot, but accountants always seem to come up with a million other factors.
Hmmm. According to that page you can make a cash donation up to 50% of your AGI, and from my understanding of AGI it's some amount less than your income. Even if your AGI is only $10,000 that's $5,000 that you can donate in cash. And for cash donations you don't need an itemized list, only a receipt.
But I agree: an account would be very helpful here.
-Phil
I was wondering about that. The IRS has this to say (emphasis mine):
(source)
This is an interesting case where you're not getting anything from the charity, but Parallax. Is this one transaction of goods for a donation? Or is it a donation to a charity and a gift from a company? I don't know, but it definitely seems like a gray area.
I take it then that PBS has some kind of special arrangement then? It seams like PBS turns into the home shopping network during funding week or what ever they call it and some of those "gifts" are quite nice. I've never seen so much Red Dwarf merchandise before.... not that that's a bad thing...
http://www.pbs.org/foundation/faqs/
(see the bottom)
So following this example I guess a the difference between the amount of the bid and the value of the robot kit could be considered a tax-deductible donation.
Many businesses around our area, - donate - no strings attached - some goods or services to IFM (or any other charity for that matter).
In Parallax's case for the last two years running, Ken has been generous enough to donate a Boe-Bot for which Parallax is entitled to a receipt for a charitable donation. The Boe-Bot is then put up for auction at IFM's annual fundraiser (which is actually coming up in about two months). The winning bidder pays the money and gets the Boe-Bot, knowing full well that the money they give is not tax-deductible because they received goods for their money. This results in one legal deduction for the Boe-Bot donor but NO deduction for the winning bidder (because they received value for their money)..
In this case, Parallax is giving YOU a gift of some robot parts because you gave money to a charity (directly). We think that was a nice thing for you to do. In the same way that we give away other *prizes* on our Forums from time to time. What we're giving away here has no cash value, because it's going to be "tossed in the dumpster" anyway.
The charity received a direct cash donation from the winning bidder - they are entitled to a tax deduction for that transaction.
Parallax thinks that was a nice gesture, so we give you a bag of parts - but Parallax cannot claim any sort of tax deduction for giving that to you.
I've been to these fundraisers, and I guarantee you that nobody would give $5 for the "bag of parts" that we're auctioning off - because nobody there has any appreciation for what those parts can do.
YOU ALL on these Forums certainly have an appreciation, and we're just trying to get you to give as much as your willing, to a great charity.
One transaction between you and IFM that you will get a receipt for. Parallax gets nothing, and is willing to ship you some obsolete parts that you may be able to use - no different that any other "contest" here, except that the winner of this contest is the one who ponies up for IFM the most.
All we have done here is that Parallax has allowed you to receive the deduction rather than ourselves.
-MattG
Stop bitching and start bidding,
-Tommy
My bid is $275
Good catch here Phil. The school my son attends (chrysalis academy) parents association runs a wine and cheese silent auction each year. You can not get a tax deduction because you received a thing of value. Same goes for raffle tickets. Check with your tax advisor.
better yet does IFM have a paypal or wepay(better as the charity does not get clipped for processing fees, they get paid by the donor so if i gave $10 to the ply-bot for erco fund I would pay $10 plus fee, IFM would get $10) And I could take the deduction legally.
just thinkin' out loud.....
Here's the info I think you're asking about: http://www.interfaithfoodministry.org/annual_report.html
as well as
http://www.interfaithfoodministry.org/donate_funds.html
This is why Parallax isn't taking your money/ donation (see my post above) - the person that is willing to donate the most to IFM, will go to the IFM website and donate their money directly, and get a charitable donation receipt. IFM is not giving you anything other than their "Thanks" and a receipt for what you gave them. Parallax doesn't get anything out of your transaction with IFM, on the contrary we think that what the donors do each year is wonderful.
Last year in fact I took my MadeUSA (rc controlled) robot to their fundraiser. He had an upper deck with a pitcher on it labeled "Cash for Food" or something like that - he MADE cash BANK for IFM - especially with the "sweet little ol'ladies" ;-) MadeUSA's going back this year too.
Somebody's entitled to the deduction (just like Parallax gets every year when we donate a Boe-Bot). In this case we're just bystanders watching you all do something nice for a charity - we don't get squat.
Like I mentioned above, Parallax could donate these parts directly to IFM and get a tax-deductible receipt ourselves for doing so. Problem is that nobody that attends the fund-raiser in (up-in-the-sticks) Grass Valley has any idea what that pile of cr*p could be used for :-) The one of you that is willing to donate the most to IFM will be shipped that complementary *pile*. :-)
Hope this clarifies
-Matt
There is a donation button on their home page.
This story circulated last year about a creative "homeless" (you can never be sure) guy who let people vote with their money: http://helablog.com/2013/04/very-creative-which-religion-cares-most-for-the-homeless Certainly an interesting approach.
My local "Rite-Aid" drug store had an after-Christmas blowout sale on many items, 75% off. I bought two of those piggy bank jars (for the twins) with a digital money counter lid, just $2.50 each. The type with an LCD readout which displays the total value of coins inserted. I thought about buying several more and making some sort of "vote with your money" scenario. Still might get some...
Anyway I made a donation. Any friend of Parallax is a friend of mine, and the cause is worthy. Keep up the good work
-MattG
My bid is $314.15
Roy knows my four weaknesses:
1) I love robots.
2) I love lowball bids that increment by a penny.
3) I love Pi. Back in gradeschool I had it memorized to 50 decimal places. Fifty is for chumps these days.
4) I'm irrational
I bid $314.159 26535 89793 23846 26433 83279 50288 41971 69399 37510 58209 74944 59230 78164 06286 20899 86280 34825 34211 70679
Good Luck
Bidding on robots...it's all fun and games until the wife finds out!!
We crossed my pain threshold when we got past $5!
This ain't no particle board or mdf...it's real plywood son... BE BOLD AND STAND UP FOR WHAT YOU BELIEVE IN!
IFM is too :thumb:
Hmmm...never quoted myself before....
If in fact we do have snipers, we gotta make this fair. Since we don't have a real-time-base to go on here - here's (literally) the "last minute" rules:
The winner will be determined by the time stamp that is the last one in the series of sniping bids that is has a time stamp "11:59" AM. If your time stamp is "12:00", it is by definition too late and does not count (because noon "straight-up" by definition occurred when the clock tripped from 11:59:59 to 12:00:00. oh, and all of this is Parallax Standard Time (PST;)
Now it's also possible that there will be multiple bids occurring in such short order, that what you see on the screen at 11:58 may not be the the "latest/highest" bid because by the time you post your bid to beat out the current bid you see, someone else could post a bid higher than what you based your bid on. So all this simply means that if you see a bid for $5 and you bid $6, but just before you post somebody else bids $7, then obviously $7 takes it, even though your $6 bid came in after the $7. duh.
In reality, I'm just happy that we're way past the $5 stage - you-all rock! :thumb:
-Matt "let's do something crazy for a good cause" G
PS: And oh, BTW, I happened to run into President Sue (and her husband Carl) this morning as a matter of fact...they think you-all rock :thumb:, and it's a no-brainer - you have the highest bid, you go to IFM website and donate, and you get a receipt from a 501c3 charitable organization.
Remember, I'm a dead man if I win this auction. Whatever you do, don't leave me to win this auction, Br'er Fox!
What part of "It's P-L-Y-W-O-O-O-O-O-D !!!" don't you understand?
Sincerely,
Plasti-Man
So bid early and often, Team. And quickly!
Sometimes, the cost of a charity donation can't truly be measured!!
THERE IS NO WAY I'M GOING TO WIN THIS AUCTION! In fact, I'll prove it. I bid $333.3333333333333333333333333333333333333!
How's THAT for prime irrationality?