I'd like to open a for profit resale shop. I would accept donations on behalf of the non-profits such as schools, churches. The non-profits would direct that donations be sent to us, we would tag items specifically for that non-profit and the non-profit would be paid upon sale of the items. Much like a consignment store except the merchandise is sold for local charities/non profits.

Can a non-profit authorize our store to issue the proper tax deductible receipt for the donations? How could the donors receive a deductible receipt for the donation without handing the items directly to the non-profit who would then turn them over to us for resale?

Many thanks.

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Originally Posted by adnil530

Can a non-profit authorize our store to issue the proper tax deductible receipt for the donations? How could the donors receive a deductible receipt for the donation without handing the items directly to the non-profit who would then turn them over to us for resale?

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Hello a:

It's an interesting proposition... If the non profits donated stuff to YOU, then YOU are the one who is eligible for the tax deduction. You can't pass that deduction on to someone else.

It COULD work, if you sold the donated items for no profit, but that doesn't seem to be what you're trying to do... You wouldn't make any money, and you'd be bringing the tax authorities down on you for NO reason...

Now, I can see trying exotic tax stuff that puts money in your pocket... But, I'd NEVER try to do stuff like this that is going to cause trouble AND cost you money.

excon

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Originally Posted by excon

Hello a:

It's an interesting proposition... If the non profits donated stuff to YOU, then YOU are the one who is eligible for the tax deduction. You can't pass that deduction on to someone else.

It COULD work, if you sold the donated items for no profit, but that doesn't seem to be what you're trying to do... You wouldn't make any money, and you'd be bringing the tax authorities down on you for NO reason...

Now, I can see trying exotic tax stuff that puts money in your pocket... But, I'd NEVER try to do stuff like this that is going to cause trouble AND cost you money.

excon

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The non-profit does not donate to me. The items never belong to me at all. They are basically on consignment for the non-profit.

Can the non-profit authorize me to accept donations on their behalf and issue the donation receipt and resale the item for the non-profit?

Quote:

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Originally Posted by adnil530

The non-profit does not donate to me. The items never belong to me at all. They are basically on consignment for the non-profit.

Can the non-profit authorize me to accept donations on their behalf and issue the donation receipt and resale the item for the non-profit?

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Hello again, a:

You SAY they didn't donate to you, in the same way a consignment shop DOESN'T buy its goods... But, the consignment shop DOES buy its goods. It just doesn't pay for them in front...

So, I would say that they ARE donating to you... But, maybe not. That's the interesting thing about your question... You really need a tax expert to tell you about that, and I'm not one of those...

However, integral to the tax question, is whether you'll be making a PROFIT on the donated items... If you're going to do that, then I'd say ALL tax donations and deductions are OFF the table, and you'll be like ANY consignment shop.

excon

Hi, adnil530!

Since your question has so much to do with a tax-type of question, I've moved it from Small Business to this forum topic area.

Thanks!