[GNC] Non-cash charity contributions

[Wm]

On 24/11/2019 18:26, Kevin Reid wrote:
> On Sun, Nov 24, 2019 at 10:14 AM Art Chimes <artsonline at gmail.com> wrote:
> 
>> I have an expense account called "charity:non-cash contributions" where I
>> record these (potentally tax-deductible) donations, but I don't know how
>> best to record the other side of the transaction.
>>
> …
> 
> Note:  I do not want to be tracking the purchase cost of every item I
>> donate, and don't want to muck about in the pond of depreciation either.
>> But I can't imagine I'm the only person who has wondered about this.
> 
> 
> Since you are not tracking the items as assets, their value must be counted
> as income or expense, as part of the donation transaction.

Heh, don't know if you've been contributing a lot Kevin but you are way 
ahead of Art in working this out.  The answer is, of course, that this 
is a local and national tax issue rather than an accounting issue.

> You could record them as income, because you are bringing something into
> your accounting that wasn't already there. Or, you could record them as
> negative expenses — if you donate, say, food, record them against your
> expense account for food. This second option seems reasonable to me because
> the sum of your expense account will then more closely track the amount of
> food you purchased for your own use, excluding the donated food.

I buy a can of tomatoes
   is that an expense or an increase in assets?
   I suggest an expense for most people unless you are buying crates of 
the stuff for trade, etc.

I gift that same can of tomatoes to a charitable organization
   was it an asset in the first place?  probably not
   If I have given the gift *in order* to alter my tax profile i think 
the tax lady would say you were a naughty person.
   If I have gifted the can of toms in the same way that I would have 
eaten them (I bought two cans and gave one to a poor person) then it 
shouldn't be recorded at all [1]

[1] accounting presumes some ordinary consumption after all

> You should make your own choice based on what seems useful to you — which
> balances you want to be able to see easily. Either will work and either is
> an improvement on leaving things in the Orphan account.

Leaving it in the Orphan is lazy thinking.

-- 
Wm