Can I deduct my open source donations?

by William Grosso

Related link: http://www.apache.org/foundation/




Somewhere along the way, Apache became a "membership-based, not-for-profit corporation." Does that have any implications for developers? If I spend 20 hours working on a patch that gets accepted, can I write off the value of my time?


I'm actually sort of serious here. If Apache is a non-profit, what can we donate to it (and how much of it can we deduct)? Their contributions web page only talks about money and hardware and therefore implicitly excludes software. How about DMOZ or Nutch? In general, can we write off the value of donated code?


Does it make sense to think about things this way? When I donate time to SD Forum or MROSD, I
don't deduct that time or energy.




Any ideas on this?


9 Comments

GerardM
2003-08-28 11:29:26
How do you value software time ?
I am sympathetic to your quest. But how do you value your work, your time ? Both money and hardware have a clearly defined value. Software and time are not as easy to value. Take your standard hourly rate, a customer signs you off for having spent that time but the tax man only has your word. The same with software; how to objectively value it?


Maybe when an organisation like Apache could sign off your time sheet and you charge them your hourly rate and similanously give them that value, it might work. You introduce a "standard" mechanism that a tax man can value.


Then again, an Organisation has to be careful. When this is abused they might loose their taxstatus.

sklar
2003-08-28 11:32:19
No, you can't.
I am neither a lawyer, accountant, tax guru, or bank teller, but I think the answer to your question is "No".


You can only deduct gifts of money or things, not time. If I volunteer for a charity, I can't deduct the time spent. (If I volunteer handing out pamphlets on a street corner for a food bank, would I get to deduct the $$$ rate per hour I charge for computer consulting or the minimum wage rate that someone hired to hand out pamphlets would get?)


If you could get an appraisal of donated source code that would stand up to an audit, you might have a case, but that doesn't really seem worth the effort.

See also:

  • http://www.irs.gov/faqs/page/0,,id%3D15955,00.html
  • anonymous2
    2003-08-28 13:15:24
    Can't deduct time, but you can deduct mileage
    You can't deduct "time" donated,
    but keep a mileage log because you can
    deduct mileage to your volunteer activities.
    Oops, there is no location.
    Never mind.
    anonymous2
    2003-08-28 17:46:52
    Loop Back?
    Donate cash to the Apache Software Foundation. (Deductable.)


    Contract work for the Apache Software Foundation.
    (Payable. Taxable.)


    Does the math work out?


    Does it help if you donate the hardware, and they loan it to you for develo--gotta go! I think there's a nickel in my cold air-retur

    anonymous2
    2003-08-28 17:48:19
    Loop Back?
    Is it true that when a non-profit pays you, you don't have to pay social security?
    anonymous2
    2003-08-28 21:27:31
    cannot donate time
    You cannot donate time, you can only donate tangible items (cash, equipment).


    With that in mind, I have worked for non-profit companies where they "paid" me, I signed the check and returned it to them and I could write it off as a donation.


    Unless you can bill the non-profit for time worked, you'll not be able to do this. I also won't claim this is 100% legal (there may be rules about not agreeing beforehand to donate your wages) but it can be done.

    anonymous2
    2003-08-28 21:37:20
    Corporations
    You need to check with your local tax agency. Tax laws vary from country to country. Corporations may be able to gain a tax deduction for non-cash donations to designated charities.


    See:
    UK is OK: http://www.aclt.org/content/default.asp?i=52&c=donation
    US is not: http://www.lectlaw.com/files/tax13.htm


    BobDuCharme
    2003-08-29 08:24:02
    they are a 501(c)(3)
    I searched the site for "501(c)(3)" and found http://www.apache.org/foundation/contributing.html#tax-status. There's little hope of deducting donations to an organization that hasn't registered as a 501(c)(3) nonprofit organization, but this shows that there is some hope. As the page says, double-check with your accountant.


    Bob

    dalan
    2003-08-29 13:40:44
    Loop Back?
    Nope, my wife works for a church, and they take out the 6%.