Posts tagged ‘tax’

Movies are Corporations (Hollywood Accounting)

By Chad Upton | Editor

One of the most interesting classes I took in College was taught by a film producer. He only taught that one class, for two hours, once a week. He shared learnings from the entire film making process, from writing a script and getting funding to shooting and distribution.

From this class, I learned is that each film is incorporated as its own corporation and there are a number of reasons why they do this.

For one, it offers limited liability. If someone sues the production, the people who financed and produced the film have some legal separation between the film and their personal assets and other businesses.

It also offers financial abstraction from the people and companies who financed the film. Here’s a little math test to help explain this concept: if it costs $300 million to make a product and then you sold $1 billion worth of it, how much was your profit? $700 million right? Yes. Unless, your product was a film or TV show.

This is almost exactly what happened with Harry Potter and the Order of the Phoenix (2007). The studio invested just over $300 million to make the film and it grossed almost $1 billion from the box office and other distribution deals. But, instead of making $700 million, it actually lost $167 million (on paper). So, what happened to all of that money? (more…)

May 19, 2012 at 4:00 pm 4 comments

Property Donations are Tax Deductable

By Chad Upton | Editor

While it’s pretty common to get a tax receipt for monetary donations to charity, not everyone knows you can get a tax deduction for donating household items too.

Some of these items include:

  • Clothing and Linens
  • Indoor and Outdoor Furniture
  • Toys and Games
  • Appliances and Electronics
  • Tools and Automotive Items
  • Books, Magazines, Movies and Music
  • Musical Instruments

That’s right, you can donate magazines and musical instruments. But, don’t go raiding your Doctor’s waiting room, useful magazines in good condition are worth a maximum of $0.50 each.

To make a claim, you need the charity or other qualified group to endorse a receipt that shows the name of the charity, the date and location of the donation and an itemized list of the articles along with the fair value of each. For donations under $250, a receipt is not required when it’s impractical to get one, such as when you deposit items in an unattended drop box. But, you’ll still need to provide the details (what, where, when, how much).

So, how do you figure out the fair market value of a book or a trombone? I recommend a free online tool from Turbotax, called ItsDeductible. They provide values based on IRS guidelines (Publication 561) and allow you to print a list that you can bring with you for the charity to sign. For full details, see the charitable donation guidelines in Publication 526.

They estimate a Fuzzy Dice to hang from a rear-view mirror is worth $3 in good condition (seriously). A good trombone is worth between $57 and $82. Do you have an extra coffee maker or microwave in storage? You could be looking at $10 or $20. Do you still have your neighbor’s tile saw? It could be worth $92 on your their tax return.

Your donations can be made to many organizations. There are the traditional charities such as: Goodwill, Salvation Army, Red Cross, CARE, United Way…etc. Donations of money or useful items also qualify for tax deductions when they are made to places of worship (churches, synagogues…etc), government (Federal, state, local), nonprofit schools and hospitals, public parks and recreation facilities, veteran’s groups, Boy and Girl Scouts, Boys and Girls Clubs of America and many other organizations.

Broken Secrets

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Big thanks to Chris for this tip.

Photo: Jen Waller (cc)

Sources: IRS (Publication 526 – Contribution Guidelines | Publication 561 – Determining Value of Donated Property), TurboTax, Money Blue Book

December 29, 2010 at 2:00 am 1 comment

Disney World has Many Legal Powers of a City

By Chad Upton

Disney World is the size of a small city, make that two small cities.

Many people believe that Walt Disney World Resort is in Orlando Florida, but that’s not exactly correct.  While it is near Orlando, The City of Bay Lake and the City of Reedy Creek (now the City of Lake Buena Vista) are incorporated into the lands of Walt Disney World Resort.

When the Disney World was announced, Walt Disney explained that a special district would need to be created for it to succeed. Due to the massive construction effort to build Disney World, Walt believed the park would need to have powers similar to a city in order to manage construction efficiently and secure control over its future.

On May 12, 1967, legislation forming the Reedy Creek Improvement District was formed. This legislation provides Disney World with immunity from county and state land-use laws, giving them eminent domain and ultimate control over what they build inside the park. Property taxes and elevator inspections are the only items that the district submits to the county and state.

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Sources: Wikipedia (Walt Disney World Resort)

Photo: Stuck in Customs (cc)

July 27, 2010 at 5:00 am Leave a comment

Why U-Hauls Have Arizona License Plates

Most U-Haul vehicles have Arizona license plates. Here’s a typical example.

The following picture was taken in the Toronto area, the information on the side is about Newfoundland and the license plate is, of course, from Arizona.

That might seem unusual, but most U-Hauls in Canada actually have Arizona plates too. The fact is, all corporate owned U-Haul rental vehicles in the lower 48 States and Canada have Arizona license plates. That’s right, Alaska and Hawaii don’t have Arizona plates, but all of Canada does. There are actually a few good reasons for this.

When I first noticed this trend, I assumed that U-Haul got a sweetheart deal in Arizona. It turns out their head office is in Phoenix, so it seems reasonable that they would register vehicles there. They also get a really sweet deal there, but this deal is not exclusive to U-Haul, it’s good for anyone with a billing address in Arizona. (more…)

April 8, 2010 at 11:19 pm 12 comments

Getting The Most For Your Charitable Donation

By Chad Upton | Editor

With the recent disaster in Haiti, I have been thinking a lot about charitable donations. My wife and I wanted to make a donation, but had no idea where to start. We wanted our donation to provide as much aid as possible by giving to a trustworthy charity with minimal administration costs and decent buying power. Our questions was: which charity meets our standards and how much should we give?

I have done some research, learned some secrets and wanted to pass them along. This should be helpful for making any type of charitable donation, not just Haiti relief.

Give Cash

It might be tempting to buy blankets for a homeless shelter or give food to a food bank, but it’s actually better to give cash. Firstly, you don’t know what that charity needs most. The homeless shelter may have more than enough blankets, but not enough soap. If you give cash, they can buy what they actually need. Of course, if you already have a stack of blankets, call first to see if they can use them or if you should hang on to them for a later donation.

Secondly, your buying power is minimal. If you brought $50 worth of food to the food bank, they’d be very grateful. But, if you gave them $50, they combine that with their other cash donations to get a bulk discount and get more food with your $50 than you can.

Texting Is Actually a Slow Way to Donate

While it is extremely fast for you to initiate a donation by texting from your mobile phone, it can take 2 – 3 months for that money to get to the Charity. From the time you send the text to the time you pay your bill, 30-45 days may pass. That’s the first delay, the second delay is your mobile carrier. According mgive.com, the mobile giving foundation, carriers release donation money to mgive every 60-90 days. Then mgive takes 10% (processing fee) and distributes the money to the charities. Most of the charities take donations at their website, this is the fastest way to turn your money into help and cut out the middle man.

Know What You’re Buying

If you can’t decide how much to give, it may help to understand what your money can buy. Here are some of examples of what a donation to Unicef can get.

  • $67.79 – Water purification tablets, cleans 50,000 liters of water
  • $232.86 –  School in a box, enough school supplies for 80 children
  • $500 – Water pump, provides clean water for an entire community
  • $1,994.77 – Maternity kit, enough supplies to safely deliver 50 babies

In other words, you’re not giving $68, you’re giving 50,000 liters of clean water.

Donate To a Reputable Charity

There are some great websites to help you find a charity that provides the help you want to give. These sites also rank the charities and provide transparency by including information such as charitable institution’s financial statements. Here are some sites, and what I like most about each one:

  • Charity Navigator – Helpful ranking of charities. Good list of Haiti charities and their ranking.
  • Network for Good – Quick links for some of the most popular charities.
  • Just Give – Great search engine for finding a charity in your own community, also has a wedding registry for charitable donations.

You Don’t Need Money To Donate

Many local charities can use your time. Use Just Give to find a charity in your community.

The Largest Charities Are Not Always The Highest Rated

The largest charities usually do the best job of raising awareness, but that often means less of your money actually goes to the cause itself. That’s not necessarily a bad thing, awareness is a very important part of fund raising, and many charities allow you to designate your gift. This is ideal if you want to ensure your money is used for aid rather than further fund raising.

Click here for a list of some of the highest rated charities you can donate to, all of these are rather large charities but few of them are charities you usually hear about. Click here for a list of the charities participating in Haiti relief (4 star charities are at the top).

Privacy

Using some of the sites I mentioned above, you can ensure your charity of choice has a written privacy policy that will protect your information. It is especially important that your information is not sold to other charities — they know you’ve given before and your phone will be ringing off the hook.

Avoid scams

The FBI recently released some tips to avoid charity scams. It is very important that you don’t reply to or click on links in any spam email. Donate directly to the charity when possible, not through third parties. Verify the legitimacy of the charity with one of the sites I mentioned above. The rest is common sense, but you can read the entire list by clicking here.

Tax Benefits

One of the best parts about giving is the tax benefit. Most donations are tax deductible and many people also take advantage of a free efile, further adding to their refund. For a few countries, I have provided links to better understand the tax benefits and implications of giving to charities: USA, Canada, UK

Giving to a charity that you believe in can be one of the most rewarding things you do, for you and the people that you help.

Broken Secrets

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Photos: Zoriah, DVIDSHUB (creative commons)

Sources: Charity Navigator, Just Give, Network for Good, mgive, school in a box, Unicef Health, Unicef Water,

January 18, 2010 at 12:59 am 1 comment


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