deductions

Forum|Forum|4 years ago
February 21, 2022
1 reply
7 views

I sell hand carved Santas through a non-profit gift shop. I determine the selling price. When an item is sold the non-profit retains 40% of the selling price as a commission. Example: $200 Santa sell for $200, n-p keeps $80 and sends me $120. Can I deduct the $80 or any portion of it as a donation to the n-p?

Deduction

MinhT1

Level 15

In your example, the $80 can be deducted as a business expense under Commissions.

It is not a donation, but a business expense claimed in your Schedule C.

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pdhochAuthor

Level 2

Thank you. In my example I did not mention that the non-profit sends me a 1099-NEC for $120. Actual numbers are $8200 in sales, $4920 sent to me, $3280 retained as commission. 1099-NEC is for $4920. Does that change your reply in any way?

MinhT1

Level 15

In this case, commissions are already deducted from the amounts paid to you and reported on form 1099-NEC. You will then report the $4,920 as income and deduct your other expenses (such as supplies, etc...). No commissions expenses as they are already withdrawn directly from sales by the non-profit organization.

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