I'm not sure where to post this question, so the "politics" seemed like the best place.

Ok, so we spend all this time, effort, and money on donating computing resources to non-profits but it's not recognized as a tax-deductible donation by the taxing authorities.

I know some of you spend incredible amounts of money on server farms and electricity costs.

Whereas I'm pretty well acquainted with the U.S. tax code, I'm not aware of any way we can fairly value our services. Adding to that, we don't receive any sort of official record of computing donation from the projects. Given this, any deduction we would take currently would not withstand an audit.

I'm interested in hearing if there are any of you who actually compute and take a deduction, and how you go about it. Has the deduction ever been challenged and what was the outcome?

Additionally, I'd like to throw the suggestion out there that if the sponsors of the projects we crunch for came up with a viable method of valuing our donations for tax deduction purposes, it would be an incentive for more people to participate in all of these worthwile ventures.

I would suggest that crunching for any Boinc project is a hobby, not a business, therefore the activities would not be tax deductible. Unless Berkeley could set itself up as a registered charity of course.

But Boinc is non-profit, no? So they qualify as a tax deductible entity.....
I would have to do some searching through the forum archives, but I recall somebody saying that the were going to claim Seti-related hardware expenses as a deduction, and claimed that a reliable tax consultant said they could do so with proper documentation......
I don't remember a follow up from them though.........

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"Freedom is just Chaos, with better lighting." Alan Dean Foster

I would suggest that crunching for any Boinc project is a hobby, not a business, therefore the activities would not be tax deductible. Unless Berkeley could set itself up as a registered charity of course.

Any donation of an item that has value to nearly any tax-exempt or non-profit organization (with certain exceptions) is tax deductible provided that there is documentation of the transaction and the item is valued at fair market value (FMV).

A work unit credit is intangible, but surely can be valued in some way by the donee.

If you would write out a check to Berkeley, you could deduct that amount as a charitable donation:

"Gifts of cash or checks allow you to claim an income tax charitable deduction for the full value of your gift."

From: http://givetocal.berkeley.edu/ways/outrightgifts.cfm

I would suggest that crunching for any Boinc project is a hobby, not a business, therefore the activities would not be tax deductible. Unless Berkeley could set itself up as a registered charity of course.

But Boinc is non-profit, no? So they qualify as a tax deductible entity.....
I would have to do some searching through the forum archives, but I recall somebody saying that the were going to claim Seti-related hardware expenses as a deduction, and claimed that a reliable tax consultant said they could do so with proper documentation......
I don't remember a follow up from them though.........

Hmmm... I think in doing that, it would be a big stretch and would probably not fly in an audit.

The issue here is that the person didn't actually donate the hardware - it was in his/her possession, and was used in donating computer services to a non-profit. The value of the hardware is not necessarily equal to the value of the donated services.

Even on a depreciated basis, any deduction in that manner would probably exceed the annual value of the donated services.

Seti or whoever would have to calculate the cost of a credit obtained on the open market (like leasing time on someone else's platforms to do the work) and use that as a cost basis for a charitable donation for the donors.

Yeah, tax gobbly-gook for sure, but I wouldn't recommend anyone trying that person's approach.

But, the issue still remains - our donations are being ignored, and therefore being treated unequally, under tax law because the donees (Seti, etc.) haven't taken the initiative here.

For some of us, that deduction would be a huge help to offset costs and encourage even more donations of computing power in the future.

I would suggest that crunching for any Boinc project is a hobby, not a business, therefore the activities would not be tax deductible. Unless Berkeley could set itself up as a registered charity of course.

But Boinc is non-profit, no? So they qualify as a tax deductible entity.....
I would have to do some searching through the forum archives, but I recall somebody saying that the were going to claim Seti-related hardware expenses as a deduction, and claimed that a reliable tax consultant said they could do so with proper documentation......
I don't remember a follow up from them though.........

Carlos was the one who said he was going to claim it on his taxes.


I was the one who argued that, according to my corporation's excellent accountants and tax advisors, donating computer cycles is definitely not considered a tax deductible donation.

This issue has come up many times in the past three years. People may be able to try and get away with it, but the tax code is simply not allowing these types of deductions and if you were to get audited, I'm sure one would get in heaps of trouble trying to pass it off as legit.

One major problem is that SETI may be non-profit, but they are not a charity, nor do they classify as one, so donations cannot be counted under tax code. That is the gist of what the accountants told me. Even if SETI@Home (or any other project) were to quantify their workunits into something of monetary value, they would have to file as a charity organization in order for deductions to be allowed. Doing so would not be in the best interests of SETI@Home as it would cause a nightmare of paperwork for the SETI Admins, not to mention a broad interpretation of the term 'charity'. Most people consider a charity to be some organization that helps needy people. SETI@Home, while a great cause, would be a tough sell to be included in the category.

I would suggest that crunching for any Boinc project is a hobby, not a business, therefore the activities would not be tax deductible. Unless Berkeley could set itself up as a registered charity of course.

But Boinc is non-profit, no? So they qualify as a tax deductible entity.....
I would have to do some searching through the forum archives, but I recall somebody saying that the were going to claim Seti-related hardware expenses as a deduction, and claimed that a reliable tax consultant said they could do so with proper documentation......
I don't remember a follow up from them though.........

Carlos was the one who said he was going to claim it on his taxes.


I was the one who argued that, according to my corporation's excellent accountants and tax advisors, donating computer cycles is definitely not considered a tax deductible donation.

This issue has come up many times in the past three years. People may be able to try and get away with it, but the tax code is simply not allowing these types of deductions and if you were to get audited, I'm sure one would get in heaps of trouble trying to pass it off as legit.

One major problem is that SETI may be non-profit, but they are not a charity, nor do they classify as one, so donations cannot be counted under tax code. That is the gist of what the accountants told me. Even if SETI@Home (or any other project) were to quantify their workunits into something of monetary value, they would have to file as a charity organization in order for deductions to be allowed. Doing so would not be in the best interests of SETI@Home as it would cause a nightmare of paperwork for the SETI Admins, not to mention a broad interpretation of the term 'charity'. Most people consider a charity to be some organization that helps needy people. SETI@Home, while a great cause, would be a tough sell to be included in the category.

Almost all schools have set themselves up so that donations are tax deductible, and S@H runs under the auspices of UCB, which has done this, and therefore donations to S@H (cash or tangible goods, not computer cycles or user time) are tax deductible. If you donate cash or some computer hardware for S@H to use as they see fit, then that is tax deductable. The US tax code is not, I believe, set up to allow deductions of computer time, so it does not matter what the users or the project would like to do.

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