awkward online auction situation

[broadway]

The question I would have is where was it auctioned If it were with only friends of the cat rescue place, then there might have not been enough eyes on the product.... I would want them to auction on EBay or some other large site with many eyes....

The items were auctioned on a Facebook group page.

The group has 1800+ members.

I wouldn't want the auction to be on eBay.

If it is just a person who rescues cats informally and not a legal organization with board of directors then just take it for what it is. Be sure NOT to take a tax deduction for this because a charitable donation in this case would not be allowable.

It is what they call a home-based rescue - not 501(c)(3), and in the past I bought items from the auctions.

I definitely do not take a tax deduction.

Do the proceeds from the auction go directly to the person who rescues the cats? If so, I don't think you'll ever know if the bid for your item was actually paid by that person, to himself. Even less lkely imo is that the daughter paid the parent for it. Can you donate food or litter instead of participating in the auction, next time?

The money goes directly to the person who rescues the cats.

The rescuer does accept food and litter donations so I will do that going forward.



I should say that there were 30+ items in this auction, and this item was the only one where this anomaly occurred. I don't think LD thought about the ramifications of "how it looks" to a 3rd party.

 

[broadway]

I answered the question. The details exist online. You seem to want to argue, I don't.

A link?

I would like to see this.

I Googled 501(c)(3) IRS incidental benefits and found nothing.
You need to be more forthcoming that it exists online.
Where online?

Or where you referring to private benefits that are incidental ? There is online info on that, but if that is what you are referring to than your initial statement about incidental benefits is incomplete.

 

[Bestwifeever]

I have been trying to get an authoritative source... but you seem to not want to answer... just vague comments...

Looking up what you gave me gives me zip... zero results from a search.... I get a lot about private benefits, but nothing on what you claim.... can you give me the IRS code number or reg that talks about where someone who set us a 501 cannot donate to it...

I found a 26-page IRS legal document with lots of referrals to other long documents that was overkill, but here is a link to a pretty clear document on a non-IRS site: Private Foundations & Self-Dealing * - Nonprofit Law Blog

Eta: even this site notes that "Of the private foundation rules, those regarding self-dealing are some of the most complex and have some of the most serious potential ramifications for a private foundation if violated." so not surprising a specific cite is difficult to pinpoint.

 

[COcheesehead]

A link?

I would like to see this.

I Googled 501(c)(3) IRS incidental benefits and found nothing.
You need to be more forthcoming that it exists online.
Where online?

Or where you referring to private benefits that are incidental ? There is online info on that, but if that is what you are referring to than your initial statement about incidental benefits is incomplete.

We had to agree in writing. It's real. Here is a simple link for a complex issue.
https://www.irs.gov/charities-non-p...ment-private-benefit-charitable-organizations

 

[CaliKid]

I wouldn't want the auction to be on eBay.

Why? Ebay seems like an easy way to get a few more bidders, no!?

 

[CaliKid]

Think about it. You might eventually get it.

Still thinking and still thinking you are wrong. You wrote, "If you have a charity, you can't donate to yourself. So if the charity is a 501c3, what they did is illegal."

I have personally started a 501c3, have personally donated to that 501c3, and have personally taken a deduction for the contribution. As long as a charity qualifies as a non-profit you can get your deduction. How the money is spent, obviously, has different rules but you can for sure get the deduction for contributing. A 501c3 is a public non profit. Family foundations have other rules, with limited deductibility, but still is deductible. It seems you have been given bad information somewhere.

 

[COcheesehead]

Still thinking and still thinking you are wrong. You wrote, "If you have a charity, you can't donate to yourself. So if the charity is a 501c3, what they did is illegal."

I have personally started a 501c3, have personally donated to that 501c3, and have personally taken a deduction for the contribution. As long as a charity qualifies as a non-profit you can get your deduction. How the money is spent, obviously, has different rules but you can for sure get the deduction for contributing. A 501c3 is a public non profit. Family foundations have other rules, with limited deductibility, but still is deductible. It seems you have been given bad information somewhere.

Probably, it came from the IRS.

 

[RunningBum]

So you haven't asked LD how this was handled, as I suggested?

 

[Texas Proud]

We had to agree in writing. It's real. Here is a simple link for a complex issue.
https://www.irs.gov/charities-non-p...ment-private-benefit-charitable-organizations

Not trying to argue, but you made a blank stmt saying someone who created a 501 could not contribute to it.... I would like to see that in writing from an authoritative source... that is all I ask... so far I have not see it...


All your link talks about is that the 501 cannot benefit a creator..... if it is set up to benefit others, such as abandoned animals, it is not set up to benefit the creator....

I still do not read anywhere that says someone who created a 501 cannot contribute to that charity.... if you got that info from the IRS, how did they give it to you?

Just as a point of reference... I was the treasurer of one and had to do the taxes etc. and follow the rules... I never heard of the restriction you state and as of now I still have not seen anything the would prevent it...

Here is the whole thing with your link...

Inurement/Private Benefit - Charitable Organizations

A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization.
​

 

[Aerides]

OP were I you, I would let this go but, it's just not the best way she could have handled it.

Assuming the best, and she actually is donating that amount of $ to the charity (or her daughter is, who knows), it's still kind of odd. But she may have been thinking she wanted to help raise bids and thought maybe someone else would go after her, or without her bid maybe it would have sold too cheap or not at all?

Either way, I doubt there was anything intentionally nefarious ("oooh let's set up a auction and get ppl to donate so we can get things cheap for us!" - nah) it's just a little... stupid.

Donate cat food and time in the future. Or a nice new trap for TNR's. And there are a LOT of good pet rescues around so maybe look for one that's a bit more formalized in the future.

 

[Winemaker]

Local Dog?

 

[Texas Proud]

It seems COcheesehead was not able to find the source...


Probably still will believe what he wants to, but I would not take his stmt as fact...

Like others have said, donating to a charity you started does not appear to be illegal... self dealing with that charity is.... a big difference IMO...

 

[COcheesehead]

It seems COcheesehead was not able to find the source...


Probably still will believe what he wants to, but I would not take his stmt as fact...

Like others have said, donating to a charity you started does not appear to be illegal... self dealing with that charity is.... a big difference IMO...

I found lots of references. You didn't like them. Ran across this little gem just this morning under IRS Penalties.
IRS penalties

If you make a donation that provides a "more than incidental" benefit to Account Holders, their family members, or entities in which they own a 35% interest, you and the person receiving the benefit may be liable for a 125% penalty tax on the grant amount

Let's not forgot here that she got a piece of jewelry in return for her self donation. It was not simply cash into the organization.

 

[Texas Proud]

If you have a charity, you can't donate to yourself. So if the charity is a 501c3, what they did is illegal.

I found lots of references. You didn't like them. Ran across this little gem just this morning under IRS Penalties.
IRS penalties

If you make a donation that provides a "more than incidental" benefit to Account Holders, their family members, or entities in which they own a 35% interest, you and the person receiving the benefit may be liable for a 125% penalty tax on the grant amount

Let's not forgot here that she got a piece of jewelry in return for her self donation. It was not simply cash into the organization.

OK... maybe I have been reading your first post wrong....

I read it to say 'a person who starts a charity cannot donate to that charity'.... which I think others have read the same way....


Now, I think you meant to say that a person who starts a charity cannot get benefits from that charity.... your word 'donate' seems to be the confusing part...

So, do you mean a person cannot get benefits from a charity or cannot donate to a charity

 

[COcheesehead]

OK... maybe I have been reading your first post wrong....

I read it to say 'a person who starts a charity cannot donate to that charity'.... which I think others have read the same way....


Now, I think you meant to say that a person who starts a charity cannot get benefits from that charity.... your word 'donate' seems to be the confusing part...

So, do you mean a person cannot get benefits from a charity or cannot donate to a charity

I can see how you misinterpreted my comment, but from the OP it has always been about her "donating" to her own charity and in return getting an item of value. That is a no no to the IRS.

 

[RunningBum]

I can see how you misinterpreted my comment, but from the OP it has always been about her "donating" to her own charity and in return getting an item of value. That is a no no to the IRS.

Only if it's a 501(c)3, as you noted when you first brought this up. Which this isn't, according to the OP. So the IRS isn't involved.

We still don't know if LD contributed personal money to the rescue efforts or just pocketed the jewelry donated. The OP apparently still hasn't asked.

 

[broadway]

Only if it's a 501(c)3, as you noted when you first brought this up. Which this isn't, according to the OP. So the IRS isn't involved.

We still don't know if LD contributed personal money to the rescue efforts or just pocketed the jewelry donated. The OP apparently still hasn't asked.

I donated the piece of jewelry in question, and I have not asked and will not ask whether LD's daugther paid for the jewelry to the rescue. There were three or four other people bidding on the jewelry. I don't know how they felt about the situation either.

 

[RunningBum]

I donated the piece of jewelry in question, and I have not asked and will not ask whether LD's daugther paid for the jewelry to the rescue. There were three or four other people bidding on the jewelry. I don't know how they felt about the situation either.

But you'll call their character in question, without the courtesy of giving themselves a chance to explain? You might as well be accusing them of putting all of the proceeds from donated items in their pocket.

Whatever. I'm out.

 

[Texas Proud]

I can see how you misinterpreted my comment, but from the OP it has always been about her "donating" to her own charity and in return getting an item of value. That is a no no to the IRS.

I think you read the OP wrong.. she donated to a charity that is not hers... but the daughter of the person who started the charity bid on and won the auction...

I do not see the OP doing anything wrong here...

 

[broadway]

I think you read the OP wrong.. she donated to a charity that is not hers... but the daughter of the person who started the charity bid on and won the auction...

I do not see the OP doing anything wrong here...

That is the exact situation.

It isn't a 501(c)(3) charity.
The person LD that I mentioned in the original post is just a person who rescues cats and asks for help and tries to raise money with auctions generally with items donated by others.

I donated a piece of jewelry to one of these auctions. There were 30+ items.
For the jewelry I donated, LD bid on behalf of LD's daughter.
Technically, since I donated the item, it was LD's to do as they pleased.
I still had the item in my possession.
It didn't make sense to mail it to LD and then to have LD mail it to the winning bidder.
I never anticipated the situation that occurred.
It only happened once during this auction, and I don't believe LD intended anything unsavory.
I think it would have been better if LD hadn't done this just for appearances sake, but it happened.

I believe that if I said anything it may not be received in a good way.

 

[NW-Bound]

Does LD spend a lot of her own money for the cause, compared to the value of your donation?

We know a woman who spends tens of thousand of her money to do charity work in a 3rd world country where she came from. We have given her several hundreds at a time to help her in this endeavor. She goes back to her native country every summer to work in orphanages, bringing food and clothes.

I get no tax write-offs for this donation, and I don't think she does either with her expenses. And I never question her integrity, as the money I gave her is minuscule compared to what she spends out of her own pocket.

 

[broadway]

Does LD spend a lot of her own money for the cause, compared to the value of your donation?

I honestly don't know what the money situation is.

I do see many items being auctioned on Facebook.

She certainly isn't wealthy and donating tens of thousands of her own money.

The value of the jewelry isn't of high cost but is of good quality heavily discounted. I scout for bargains.

 

[COcheesehead]

I think you read the OP wrong.. she donated to a charity that is not hers... but the daughter of the person who started the charity bid on and won the auction...

I do not see the OP doing anything wrong here...

Sigh. I think you still have my meaning twisted, but why bother anymore.