Re: [taxchat] Joint venture

after being absent from the chat for awhile, & reading through everyone's responses, what you have here donna is the correct way of reporting.  it's a 1-shot deal (not a busn or SE), its not a hobby (1-shot deal), & the intent is to raise money for the parish.  i agree that all of this should have been run through the church (as members contributing their time), but seeing that it wasnt, then they should do the spreadsheet, as they are splitting all income & costs.  the amount they donate is just that, a contribution.  you had it right from the start, IMHO.
lynne

Donna J. Perrone wrote:

The music director/organist of our church is my client.  She joined forces with our 2 cantors, a husband and wife, to produce a CD with religious selections and other comforting music. They are donating all the profits to our parish.

 

This is basically a one time event. I am thinking about how this will be reported on my client's return this year. My first thought is that the income would be on line 21, the expenses on Sch A, subject to 2%, and the profits donated reported on Sch A as a charitable contribution.  Since the organist and her husband have a high AGI, they can very well lose the deduction for the expenses.

 

Any thoughts on this?

 

Donna Perrone

 

Donna J. Perrone, EA

East Haven, CT

203-469-4939

203-468-2038 fax