Non-Profit gift/donation question....

I will say one thing though. This only applies to the receiver. PIF for example wouldn't be a non profit unless it follows charitable organization tax law. That of which I'm not well versed in.

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Gotcha...

And let me add...

Jim, when you end up in jail, text me.  you got the number

Thanks bro. 

Sincerely,

Jim

I will say one thing though. This only applies to the receiver. PIF for example wouldn't be a non profit unless it follows charitable organization tax law. That of which I'm not well versed in.

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The real question is if there is any reason to formally make PIF any sort of organizaion, non-profit, tax free, or otherwise.  I'm guessing as long as any given fund raising event is less than $14K, no one (the IRS!) really cares.  And there's probably even ways to get around that by just setting up donations directly to the receiver.  From an IRS point of view, it's a bunch of guys all gifting a small amount to one person.

-Allen

I'm guessing as long as any given fund raising event is less than $14K, no one (the IRS!) really cares.  And there's probably even ways to get around that by just setting up donations directly to the receiver.  From an IRS point of view, it's a bunch of guys all gifting a small amount to one person.

-Allen

That's what I'm hoping for....



Sincerely,

Jim

I was figuring that is a question that may be under consideration. If PIF stays in current format of helping one person or two persons like for example unfortunate kayak angler A, then likely would not be looked as a bona fide donation that is subject to tax deductible treatment.  If PIF was to raise money for a charitable purpose... Like helping local needy families of unknown name or other charities then maybe.  But what might work better would be for PIF to partner with a local charity to host the event, and then $ donated could be considered tax deductible.

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Otherwise if you want to continue doing it the way we are doing it, it would probably not be looked upon by the IRS as anything other than what pole said above.  A bunch of people who are having fun and raising money for someone who needs it.

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I was figuring that is a question that may be under consideration. If PIF stays in current format of helping one person or two persons like for example unfortunate kayak angler A, then likely would not be looked as a bona fide donation that is subject to tax deductible treatment.  If PIF was to raise money for a charitable purpose... Like helping local needy families of unknown name or other charities then maybe.  But what might work better would be for PIF to partner with a local charity to host the event, and then $ donated could be considered tax deductible.

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If PIF applied for and was granted non-profit status...wouldn't donations TO PIF then be tax deductible, and wouldn't donations FROM PIF also be tax-free for recipients (in past Mooch, Shicken, in future Shicken or other member of NCKA battling cancer etc) as long as under $14K??

Sincerely,

Jim

I was figuring that is a question that may be under consideration. If PIF stays in current format of helping one person or two persons like for example unfortunate kayak angler A, then likely would not be looked as a bona fide donation that is subject to tax deductible treatment.  If PIF was to raise money for a charitable purpose... Like helping local needy families of unknown name or other charities then maybe.  But what might work better would be for PIF to partner with a local charity to host the event, and then $ donated could be considered tax deductible.

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If PIF applied for and was granted non-profit status...wouldn't donations TO PIF then be tax deductible, and wouldn't donations FROM PIF also be tax-free for recipients (in past Mooch, Shicken, in future Shicken or other member of NCKA battling cancer etc) as long as under $14K??

Sincerely,

Jim

Non-profit doesn't automatically mean tax exempt.  More paperwork for that ...

I'll let Ben answer the rest.   

-Allen

as long as under $14K??

If it's under 14k annually then it still falls under the personal gift exemption. If it goes over 14k (the amount varies year to year) then PIF would benefit from NP status and the donation wouldn't be subject to taxation...depending on which status PIF is filed under. I think.
But there are other reasons why PIF would benefit from becoming a NP org. Donations would be tax write offs for companies that donate raffle prizes, for example. So it would be easier to solicit prizes from big companies. Other benefits include reduced rates for insurance coverage, event permits, etc.
It appears to cost about $300 to form a 401(c). Give or take...there are a few different ways to do it, like legalzoom and/or pro-boner help from an empathetic lawyer (insert lawyer joke here haha).

Or......we could just keep it on the low low and not say anything.

If PIF applied for and was granted non-profit status...wouldn't donations TO PIF then be tax deductible, and wouldn't donations FROM PIF also be tax-free for recipients (in past Mooch, Shicken, in future Shicken or other member of NCKA battling cancer etc) as long as under $14K??

Sincerely,

Jim

The only problem with that is that there's a lot of tax law out there about the donations having to go to something like a "disinterested" party to be deductible.  If I was to donate say $100 to PIF, and I knew that the donation was going to my friend, NCKA Angler, then it would generally not be considered deductible.  If I was donating $100 to PIF, and PIF was using that $100 for some unspecified, charitable purpose, then it may be considered deductible.  But PIF would also need to be disinterested from the final party.

Its the same as me say donating $100 to NCKA Angler directly if he's having financial problems, which isn't tax deductible.  The purpose of the non-profit has to meet specific IRS regulations and its really difficult to meet those. 

Overall my knowledge of charitable tax law is minimal since I've never been involved in it.  I bet Jim Dolan would know more and I know a guy who would probably know.  But other than that I would say the Tote method is the best way. 

Geez....this stuff is confusing...

My main concern is that I think every penny donated should go the person/s we are helping and not to taxes paid by them or us (as it has been for the past 4 years)....if there is a way for this to be done then I say we do it (I think it WILL be easier to solicit donations as an established Non-profit even is the donations end up not being tax-deductible for the donor) ....but it sounds like it is way more complicated than that... 

Lemme talk to the fellas some more...

Thanks for all the advice.

 

Sincerely,

Jim

The only problem with that is that there's a lot of tax law out there about the donations having to go to something like a "disinterested" party to be deductible.  If I was to donate say $100 to PIF, and I knew that the donation was going to my friend, NCKA Angler, then it would generally not be considered deductible.  If I was donating $100 to PIF, and PIF was using that $100 for some unspecified, charitable purpose, then it may be considered deductible.  But PIF would also need to be disinterested from the final party.

If you were donating it to the general PIF fund and it was up to the officers discretion where that money went, is that the same?  In previous PIFs (and other events), it was pretty obvious where the funds went.  Moving forward, it may not be as obvious.  The money could go to a cancer research foundation, or it could go to TBD member in need.  Or it could go in the bank for a rainy day.

There is value in having donations be tax deductible if there is a perceived value to the people/orgs that are donating.

On a different note, there is value in being more organized.  As PIF has grown, we're not talking about insignificant amounts of money.  And as we have grown beyond a small core group, it's even more important to understand the flow of that money (how it's used and where it goes).  You don't necessarily need to have non-profit status for that, but it can be helpful.

-Allen

I don't know the answer to how non profit money has to be spent.  That would have to go to someone else. Sorry.  I do know a guy who works for a charity who might know more. If you want to try to reach him lmk. He's family.

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The Money in a non profit has to be spent with in the scope it was set up. Like if your set up for education of fishing it should be spent that way. I helped to fill out paper for a non profit. And you have to have a Item that your organization supports. You have to keep all the paper work where and how the money is spent. Your a nonprofit so you can ask for donations that companies and individuals can deduct from their taxes. With out that status the donor Can be taxed on what he thought was deductible. And you just pissed that person off because he may get an audit. That happened to a person I know and he would never donate to that person again. As for a gift I'm not sure how that works. Look up a Form 501c3. and then the 1023 forms. We did both and I'm sure you may find your answers there. It is best to get both statuses.   

Gonna revive this thread at the request of my wife...

 

So...here's the deal:

1. PIF is still not a non-profit
2. Do Porky/Mrs. Porky have to declare come tax time any of the $$ raised for Hailey's medical expenses by PIF/NCKA community?
3. Do I have to declare come tax time any of the $$ received for PIF/AOTY/DOTY via the PayPal account that I set up this year for PIF/AOTY/DOTY?

All $ received via PayPal has been/will be donated to the Pass family with the exception of $1,300 for AOTY/DOTY prize plaques....the PayPal account is under my name but is really just a conduit for PIF/AOTY/DOTY and no $ in there goes to me or my family...

I have written Porky three checks from the Paypal account totaling $5,138, and one check to Mrs Porky for $2,593, for a total to the Pass family of $7,731.

The remaining $7,335 raised has been given in cash and personal checks from other people...

Bottom line...I don't want Porky or myself to "get in trouble" come tax time because of any PIF related stuff...

Any advice/guidance greatly appreciated!

 

 

Sincerely,

Jim