Business Accounting Question

[Fred Bone]

On 16 March 2011 at 18:42, Eric Morey said:

> On Wed, 2011-03-16 at 15:04 -0700, Mark Phillips wrote:
> > 
> > 
> > On Fri, Mar 11, 2011 at 9:12 PM, Eric Morey <eric at glodime.com> wrote:
> > 
> > > 
> > >         Then you have no donation to keep track
> > >         of. You have a sale with a $15 Cost of Goods Sold. 
> >         
> > 
> > I believe there is a donation component, which is the difference
> > between the cost (ie fair market value) of the goods or services
> > received and the amount the donor gave to the charity. 
> 
> Fair market value is a bit subjective, but in this case you are selling
> sweathshirts with an established wholesale value of $15. It is common for
> retail prices of sweatshirts to be $25 and generally above wholesale
> costs. Although your unlikely to be audited, there is a good chance that
> the IRS would not agree with you about a donation here. 

Do they not publish guidelines on this sort of thing? HMRC certainly do 
(though of course the guidelines are not interchangeable, as they reflect 
different tax laws).