
NY bill would provide tax credit for open source contributors - based2
https://opensource.com/government/16/3/ny-bill-tax-credit-open-source-contributors
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DenisM
Up to a maximum of $200 per year. Not very exiting.

On a related note, could one create a non-profit open source company, and
donate software to it and get tax write-off? Rich folk can get huge tax write
off donating art works, we should be able to figure out a similar deal.

The question is how to value the contribution. Few things come to mind, most
of them ugly - 1) by time spent at prevailing wage for your experience level
2) by line count 3) by some sort of proxy for market value.

Artworks for the rich have advantage in that there are fewer of them that get
attentions and they are more expensive, hence a market for each one easy to
establish with auctions, expert opinions, and the like.

I'm thinking we could have some kind of payback thing, where users of open
source would declare how much time they saved by using the software, or how
much an alternative would cost, and then we could use this as a proxy for
value.

Dunno. Just a bunch of random ideas for brainstorming.

~~~
patio11
_donate software to it and get tax write-off?_

Donations are valued at your basis in them. Your basis in software you
developed will generally be zero. Your basis in paintings you painted is
slightly higher than zero: the cost of paint.

If you _buy_ software or paintings, your basis the "the cost required to
acquire them." So if you wanted to _buy_ a major piece of software then donate
it (subject to the usual requirements for this to not be abusive), then you'd
be able to take the charitable deduction.

In most cases, the people writing OSS work for corporations. Corporations have
a very simple way to get tax benefits from supporting OSS work -- expense it.
Done.

~~~
DenisM
Indeed, as far as IP is concerned, the following rule governs.

[...] your deduction for a donation of a patent or other intellectual property
is its FMV, minus any gain you would have realized if you had sold the
property at its FMV on the date of the gift. Generally, this means your
deduction is the lesser of the property's FMV or its basis. For details, see
Publication 526. [...]

[https://www.irs.gov/publications/p561/ar02.html](https://www.irs.gov/publications/p561/ar02.html)

However it's not clear to me that the basis is zero for IP. Can you clarify
with citations?

~~~
hundt
From Publication 551, "Basis of Assets"

"The basis of an intangible asset is usually the cost to buy or create it."

They don't mention software specifically, but they say that for patents and
copyrights you can only include costs you actually paid for, and you
specifically may not include the value of your own time spent inventing or
authoring.

[https://www.irs.gov/publications/p551/ar02.html#en_US_201412...](https://www.irs.gov/publications/p551/ar02.html#en_US_201412_publink1000256923)

~~~
DenisM
Thanks a lot! I spent a bit of time, but didn't get to this.

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aczerepinski
Seems silly to me. Add complexity to the tax code to give an
insignificant/unnoticeable break to one of the wealthiest demographics around.
The existing financial incentives for open source contributions are probably
two orders of magnitude greater than this.

~~~
adrusi
You think existing incentives for open source work could equate to
$20,000/year? Two orders of magnitude is a lot.

~~~
MichaelBurge
It seems reasonable that being a core developer of R could land you at least
$20k in consulting contracts.

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rwallace
The '$200 per year, not interesting' comments are missing the point. Politics
is a game of increments. If you want a measure in place for a large amount of
money a few years down the line, you typically need to get it in place for a
small amount of money this year, and then next year show it didn't blow up in
anyone's face. So yes, this is a very good move.

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awinter-py
The bill _seems_ like it doesn't permit deducting the same project more than
once. (They apparently modeled the project lifetime on JS).

[http://legislation.nysenate.gov/pdf/bills/2015/S161](http://legislation.nysenate.gov/pdf/bills/2015/S161)

    
    
      An election may not be made if such election is in effect
      for such individual for any other taxable year and
      pertaining to the same program or any portion thereof.
    

Also, do expenses include my time value? If not, what other expenses are there
for OSS devs?

That said, if this passes it will be most positive piece of software
legislation from 2016. Only downside is if taxation brings about regulation.

~~~
elros
> Also, do expenses include my time value? If not, what other expenses are
> there for OSS devs?

I'm not sure from a legal standpoint as IANAL, but I can think of the price of
a computer, a desk, a chair, Internet, etc. There are other costs associated
with contributing to OSS in addition to the time.

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intrasight
That article was poorly written. But then again, the bill was poorly written.
A "200 max" isn't going to be worth anybody's time. And anyway, what problem
is this bill trying to address? If I'm a business and I have an expense, I
write it off. If I'm make a donation to a non-profit, I write it off. What
does this bill change?

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tryitnow
Reminder: You can already deduct volunteer-related expenses from your federal
taxes, so long as you volunteer for a qualified organization:

[https://www.irs.gov/pub/irs-pdf/p526.pdf](https://www.irs.gov/pub/irs-
pdf/p526.pdf)

See Table 1 and Table 2 in the above publication.

I think this is just extending this to NY state taxes, limiting to OSS
development, and capping it at $200. All of which is a bit odd, but I guess
it's a foot in the door and symbolically recgognizes OSS.

~~~
DenisM
You can't deduct your hours, only incidental expenses like gas and bus
tickets.

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ant6n
As I understand it, if artists donate works they can only deduct the
materials. The problem is basically that you can donate value, which can
result in a deduction - but if that value is achieved through work, you'd have
to pay income taxes on that. For example, you could donate, say 5000$ to some
non-profit software organization, then have that organization hire you to
write FOSS, for 5000$ dollars, and get back that money. On the donation you'd
get a deduction, but on the pay-back you'd owe taxes - so you're back at
square one.

I don't see how donating work could work, given how taxes work. Is there any
example where donating work is tax-deductible?

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microcolonel
This is ridiculous. $200 is below the noise floor.

~~~
JshWright
You may be surprised to learn that threshold varies quite a bit from person to
person...

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based2
src:
[https://www.reddit.com/r/programming/comments/4ayh2x/ny_bill...](https://www.reddit.com/r/programming/comments/4ayh2x/ny_bill_would_provide_tax_credit_for_open_source/)

