[CrackMonkey] No Taxes

[Seth David Schoen]

Emad El-Haraty writes:

> I think I just figured out how to never pay taxes again.
> Please review.
> 
> 
> My idea is as follows, start a company with yourself as the 
> sole proprieter. Sell your software product for an exorbitant
> amount. It does not matter if no one ever buys it. Donate 
> a large amount of software liscenses to various non-profit 
> organizations. Receive a huge tax deduction.
> Example:
> Say I make 50k a year working for some comapany. I start my
> business "Emad's Skunkworks" and sell my rendition of 
> hello world for 5k each liscense. Now, I doubt anyone will
> ever pay for HelloWorld but in a world where Microsoft is
> successful who knows? At any rate... you never have to get
> anyone to buy the product. Just donate 10 liscenses to your
> mosque/church/synagouge. Thats a 50k donation you made.
> Get a 50k tax deduction. Now you have to pay taxes on 0$. 
> Taxes on 0$ == 0$ ..
> 
> Am I right? Or have I finally cracked?

Accounting standards contain rules for assessing the value of computer
software, and those rules would be applied to evaluate whether the claimed
value of an in-kind donation is reasonable.

Whether those standards are fair is another question.  For instance,
Microsoft is presumably getting tax deductions for the value of each
copy of Windows it donates to a 501(c)(3) organization.  The argument
would be that those copies have a "value" which is transferred from
Microsoft to the recipient of the donation.  (But the means of transfer
are very, very indirect.  It's actually a matter of "Microsoft
hypothetically loses potential revenue in exchange for promising not to
sue the recipient for using its software" -- is that really a "donation"?)

-- 
Seth David Schoen <schoen at loyalty.org>  | And do not say, I will study when I
Temp.  http://www.loyalty.org/~schoen/  | have leisure; for perhaps you will
down:  http://www.loyalty.org/   (CAF)  | not have leisure.  -- Pirke Avot 2:5