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On Wed, Jul 3, 2019 at 7:27 AM Kristian Fiskerstrand <k_f@g.o> wrote: |
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> |
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> On 7/3/19 12:47 PM, Rich Freeman wrote: |
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> > You also need to consider the tax savings themselves if the umbrella |
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> > is 501c3. That is also a percentage of the net (the CPA costs being |
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> > deductible most likely). |
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> |
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> It depends on the type of income, iirc e.g GSoC wouldn't be tax exempt |
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> in either case. Same for royalties from sale of merchandise |
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Certainly some forms of income aren't tax-exempt, and we should |
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definitely get a professional opinion on this. However, have you seen |
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anything to suggest GSoC specifically is taxable? |
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I have been skimming the IRS materials, and in their training on the |
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subject they specifically bring up the example of a once-a-year food |
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stand that generates income at a conference, and that it wouldn't be |
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taxable because it isn't "regular" income, being only once a year and |
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doesn't really compete with a normal business that would be open every |
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day [1]. However, I don't profess to be an expert on IRS tax law. |
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It is probably a good idea to consider that some income will be |
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taxable. Of course, it is still only net profits that are taxable, so |
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any GSoC money spent on GSoC itself wouldn't be net-taxable even if |
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the overall income would be (at least, that is my understanding). |
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And of course if we were using an umbrella org the org itself would |
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have its compliance staff make these determinations and have rules |
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around this stuff. We wouldn't need to develop our own expertise and |
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chances are their staff could also make recommendations on how to |
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structure activities to minimize tax burden. If they're charging |
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based on net income then it would be in their interests to minimize |
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our taxes anyway. |
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> |
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> > |
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> > You also need to consider services that we would receive that we |
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> > currently lack. After all, Gentoo hasn't spent a dime on CPAs for a |
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> > long time, but that was hardly a true savings. |
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> |
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> Also needs to account for potentially higher future earnings, we haven't |
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> actually been doing active fundraising. |
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I have mixed feelings on this. Numbers-wise you're right - if some |
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professional umbrella org gets a shared of anything donated to |
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"Gentoo" they're going to be out there advocating for people to donate |
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to "Gentoo." As a result "Gentoo" will probably end up with a lot |
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more money. On the surface this seems like a good thing. On the |
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other hand, I do get concerned about what effect this could have on |
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the community and atmosphere of the project. |
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This is part of why I advocate for trying to reduce our dependency on |
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money and servers and so on. These things all potentially come with |
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strings attached, and I'd prefer to be more dependent on the goodwill |
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of our code contributors than the goodwill of our |
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financial/sponsorship contributors. I feel like a lot of bigger FOSS |
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projects eventually reach a point where the people in charge end up |
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with the opposite concerns - where they prefer all the core stuff to |
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be paid so that they don't have to worry as much about the rank and |
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file deciding they don't like the people in charge. |
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As much as we have disagreements around here, I think that those in |
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charge are very much community-oriented in their roots. Some might |
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disagree, but I'd caution that to the degree that some disagree, the |
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professional managers that come with big budgets are going to be FAR |
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less to your liking. |
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1 - https://www.stayexempt.irs.gov/home/existing-organizations/unrelated-business-income |
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-- |
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Rich |