[GNC] Non-cash charity contributions

[Stan Brown]

On 2019-11-24 14:16, Wm via gnucash-user wrote:
> 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.

No, I don't think "instead of" is right. It is a tax issue (which the OP
didn't ask about, but several of us have addressed it anyway) and an
accounting issue, both. It is unfortunately true that computations of
tax do not always use the same rules as ordinary accounting.

> 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.

And as I mentioned, in the US -- remember that the OP asked specifically
about the US -- there are special rules for inventory. However, from the
general tone of the OP's question it doesn't seem that he's looking to
donate goods that he originally purchased with the intention of
reselling them.

>   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.

Emphatically, no. I don't know how it is in other countries, but in the
US, a long time ago, our Supreme Court made a distinction between tax
avoidance (legal) and tax evasion (illegal). Tax avoidance is arranging
your affairs so as to minimize your tax liability. Making a charitable
gift in order to alter your tax situation is 100% legal tax avoidance,
at least in the US.

>   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]

Giving something "to a poor person" is not a charitable donation under
US law: the IRS Web page I already cited says that gifts to individuals
are not deductible donations. Giving that same can of tomatoes to a soup
kitchen or similar _is_ a charitable donation. Or more specifically, it
is if the soup kitchen is registered as a charity.

-- 
Regards,
Stan Brown
Tompkins County, New York, USA
https://BrownMath.com
http://OakRoadSystems.com