Forum Moderators: martinibuster
Does Google put a value on, or track the cost of serving public service ads,.... and then take any form of tax credit, tax deduction or reduction against earnings since "serving public service ads" is a form of corporate contribution to non-profit organizations?
Is there a tax saving possibility for webmasters who are paying for bandwidth to serve the public service ads, giving up otherwise valuable advertising space to serve public service ads, paying someone to maintain the website that runs the public service ads, etc.?
While Google is providing the feed it's ultimately the webmaster who is publishing the public service ads, giving up the ad space to serve "no pay" ads, etc.
I suspect the value of this "contribution" would be in the millions of dollars. How much would the various non-profits have to pay for advertising and promotional costs "but for" the thousands of webmasters serving such ads "out of the goodness of their hearts (conracts)?
Is there a tax rule that lays out whether you can assign a value to placing such public service ads on your site and can't you take a deduction as a contribution in kind, with value, to a non-profit organization?
As I recall, at least at one time there were rules that allowed for valuing in-kind contributions for tax purposes. For instance, I might donate the "making of a last will and testament" to a non-profit organization that was running a Chinese auction and would use my "gift" as one of the auctioned items. I was told I could place a value on the service and could take a deduction as a contribution in kind. (Not sure I ever actually claimed such contributions.)
Perhaps you should be supplied with stats about just what your contribution (non-profit ad run rate) is?
I wouldn't bother to raise the question if it didn't strike me that the potential value of the millions of non-profit ads could be considerable, especially to webmasters displaying them thousands of times each day.
I don't participate in AdSense so this isn't my issue, but it certainly has me wondering, especially if Google, itself, is taking any form of deduction, credit, reduction of income, etc. for serving the ads through its network of publishers. If Google lawfully can claim a charitable contribution - but is not - I don't quite understand that since even the best of citizens will take deductions for any form of charitable giving to the fullest extend allowed by law.
I'm not a tax expert so I may be off base, but since the ads are served in many different countries there might be one or two countries where you could rightfully assign a value and take a deduction or get a credit.
Jeff Esq.
- CompWorld
You do bring up an interesting question on whether website owners can take a write off. I'm not an accountant, but my guess is they probably can if they have records and can relate them to some sort of expense like lost revenues in the advertising space during the times PSA's were shown and/or additional bandwidth cost.
If you want to donate ad space on your server, set up your own charitable ad campaign, and display your own ads - even as an alternative to Google's PSA's. But don't pretend you're making a "donation" when your intention is to profit, and it just happens that Google serves a PSA to your webpage.
(For that matter, while you're serving a few lines of javascript, the bandwidth for the inline frame is paid for by Google, and the server which serves the ads belongs to and is maintained by Google.)
The Value of Your Time or Services is NOT deductible.
You can't even deduct the value of your blood.
Only Property and Cash is deductible. You can be reimbursed for out of pocket expenses made during volunteer work - but I don't think you'd be able to do it in this case (or that it would amount to much even if you could). I was going to do some research on why, but you'll just have to do your own - or accept "just because" :)
I was going to say hyperkik was wrong - and it doesn't matter what your intent is, but it turns out that:
"A charitable contribution is a donation
or gift to, or for the use of, a qualified organization.
It is voluntary and is made without
getting, or expecting to get, anything of
equal value."
From Pub 526
Anyone every hear the word "inventory" associated with "advertising"? Say, in the context of selling off banner ad rotations? Elsewhere in the ad industry?
Anyone in the print advertising business? Anyone have any experience with magazines "donating" advertising inventory, say ad space for public service promos? How is that handled?
If you run enough sites that serve enough public service ads the question may be worth the study. May or may not apply in the US. Abroad?
Donative intent? Interesting question. Intent as a bar may not apply squarely since, upon entering into the contract, you agree that you only get paid for commercial ads. Conversely, are you saying that Google's contract forces webmasters, against their will, to run ads for non-profit organizations? Contract of adhesion principals? Don't think so. Mutual agreement to make ad space inventory available.
To really understand tax law you must love tax law like big corporations and the wealthy love it.
I'm neither a big company nor rich at the moment ;-0!
Compworld, it is rude to respond to a long post without reading it.
It does seem, however, that you are donating both property and cash.
You could argue that more effort would be incvolved in changing ad code jsut before the PSA was shown, but so does all money makeing, and I'd argue that publishers show PSAs willingly and out of their own choice. Technical feasibility shouldn't play a role.
SN
Inventory. If you contribute inventory (property that you sell in the course of your business), the amount you can claim as a contribution deduction is the smaller of its fair market value on the day you contributed it or its basis. The basis of donated inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. You must remove the amount of your contribution deduction from your opening inventory. It is not part of the cost of goods sold.If the cost of donated inventory is not included in your opening inventory, the inventory's basis is zero and you cannot claim a charitable contribution deduction. Treat the inventory's cost as you would ordinarily treat it under your method of accounting. For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year.
In any case, anyone trying this had better be prepared to justify to the IRS exactly how they arrived at their valuation. In other words they should have PAID ads (not affiliate links) that could have been served instead, but were withheld because of the webmaster's devotion to public service.
