Topic: Bitcoin Business Idea (Donations) (Read 2456 times)

Actually, delving in to more detail, it looks like the max a person could deduct for charitable giving is 50%, even if the sole purpose is to give the funds away.



Further limits also apply if the donations were made to some specific types of charities.

The only way to not pay at least some tax on a project like this is to create a non-profit, then apply for tax exempt status.  As far as I can tell, the OP's organization would meet the requirements for tax-exempt status laid out here:  http://www.irs.gov/charities/charitable/article/0,,id=136459,00.html

I know it's not income, and you know it's not income, but the IRS won't know it's not income when they see unaccounted-for tens of thousands in transfers in and out of the donation-distributors bank account.

If the OP did file his taxes properly, he would have to show it all as income, then show himself donating the same amount away.  The thing is, there could be limits on deductibility of donations (or limits on other deductions/credits due to the high unadjusted income reported), and he could end up paying more taxes as a result of funneling all of that money through himself.  And I can guarantee that the IRS won't take his word for it anyway, that he donated potentially 80-90% of his income.  He WILL get audited, and he'd better be dang sure he kept all of the receipts for all of the donations made.

This is why I suggest he set up a non-profit org, a separate bank account, and keep all of the records completely separate from himself.  And those records better be well-kept too, or he could be out a good deal of coin when the IRS audits his newly founded non-profit.

How do you turn bitcoins into checks though?  That's my point.  Whenever you exchange the bitcoins for USD, you'll create a record for (potentially) thousands or tens of thousands of USD.  And that record won't go unnoticed by the IRS.  They'll ask questions about where you are getting all this income, what it is being used for, why you aren't paying taxes on it, etc.

http://forum.bitcoin.org/index.php?topic=25574

So you propose exchanging coins via one of the cash-through-mail services?

Sounds like a bad idea, especially if someone knows where you live and knows you have envelopes filled with cash delivered to your house on a regular basis.  Excellent way to lose lots of people's donations.

Mix it with glbse.com

I actually don't much like this idea. To me it seems better to withhold donations to charities until they accept Bitcoin.

We know Bitcoin is good - so perhaps we accomplish double-charity when we put market pressure on others to realize the same.  

It'd be quite the mess for taxes for whoever decided to do this... transferring thousands of USD in and out of one's bank account isn't going to go unnoticed by the IRS.  And then you have a good deal of explaining to do, especially if you haven't kept proper records.

If you do it, I'd set yourself up as a non-profit org, and get a separate bank account.  It'll make things much easier on you.

Would this not be a very simple solution for the issue with EFF having issues with accepting Bitcoin donations?

this can be connected with something i've been working on. It's a "Pay with Bitcoin" service that takes the bitcoins, trade them for other currency, and wire the the amount to a 3rd party, every period.

I've been thinking about doing it in a new model i call OBB - Open Bitcoin Business. It's the business version of OSS (Open Source Software). It is an open source business that is managed much like an open source project, but it has money - and that's the difference. Bitcoins, to be specific. The group does everything with the bitcoins based on their policies. Decision are arrived at (not taken) using discussion and strive for consensus, much like in wikipedia. Everything is Open. Some members will be Admins, meaning that they are trusted (with access to the wallet, for example) - but not privileged (with taking decisions etc).

Such OBB would also be able to raise money (bitcoin) in an open, market driven & transparent way. The OBB states his desire to raise an amount, and the maximum payback of the amount (the payback should reflect the risk associated with the investment) so for example - a new OBB could raise 1000 bitcoins, with a payback of 10,000 Bitcoins (this makes sense if there is more then 10% chance the new OBB would be able to pay the payback). However, another potential investor - may bid 1000 bitcoins with a payback of 5000. The OBB would always take investment from the bids with the lowest paybacks.

I'm willing to pledge 500 bitcoins for such OBBB as a seed investor

In fact, I've used bitcoins to register the domain (openbitcoin.biz), lease a server and installed MediaWiki on it.

see http://openbitcoin.biz/wiki/ (still in a very initial definition stage)

and just like OSS - everyone is welcome.

I would like Kiva.org to start accepting BitCoins instead of paypal. A great deal of money is lost when making transaction lending to people from a different country.

Sounds like a great idea.   This should be a category for

  http://spendbitcoins.com/

to add.  The main guy for that service is on these forums -- find him and point him here.

Setup a service to accept bitcoins on behalf of foundations and non profits.

The addresses would be in public database on a simple site.

So red cross UNICEF. They don't take donations in bitcoins but they don't have to as this service would be a proxy. So lets say on the first of each month. How many ever bit coins are in each account are just converted to USD and a check is cut and sent. The checks would be from XYZ donations corp the letter would also explain where the money came from. This gets around the volatility problem as the deal is X bitcoin converted to USD on the first of each month. The donation corp could then keep small 0.5% for postage processing. You could also donate to the master address that spreads your donations evenly.

Any takers?