I created a template for an 8-page monthly print publication and created the publication for print each month for 7 happy years. The client hired a new PR person who suddenly let me go and demanded my source files. I'm wondering if I can make it a tax-deductible donation to them since they are a non-profit and what amount I could claim for this on my taxes? I estimate that I spent about 10 hours creating the template and averaged 6-10 hours per month putting together the publication.
change accordingly to search. Donations on taxes site - look at the links at the bottom of the page
"Non-Cash Contributions of Property
Contributions of property (other than cash) are subject to strict record keeping and substantiation rules. You must be able to substantiate the fair market value of the goods or property you donated, plus keep any written acknowledgments you receive from the charity. Fair Market Value of Contributed Property You must make an assessment of the fair market value of the property you contribute.
Non-Cash Contributions Totalling More Than $500 You must attach IRS Form 8283 if your total non-cash contributions exceeds $500.
Car Contributions: Must Have Written Acknowledgement If you contribute a car, truck, boat, airplane, or other vehicle, and the vehicle is worth more than $500, you must received a written acknowledgement from the non-profit before you can claim a tax deduction.
Non-Cash Contributions over $5,000: Must Have Written Appraisal If you contribute property worth more than $5,000, you must obtain a written appraisal of the property's fair market value.
Limits on the Charitable Contribution Deduction
Your charitable contribution tax deduction may be limited. There are limits specific to charitable contributions, and there are general limits on itemized deductions. 50%, 30%, and 20% Limits on Charitable Contributions Generally, you can deduct cash contributions in full up to 50% of your adjusted gross income. Generally, you can deduct property contributions in full up to 30% of your adjusted gross income. Generally, you can deduct contributions of appreciated capital gains assets in full up to 20% of your adjusted gross income. Charitable contributions in excess of these limits can be carried over to the following tax year. The excess contributions can be carried over for a maximum of five years.
Not Tax Deductible
Contributions are not tax deductible if given to any of the following: Political parties, political campaigns, or political action committees. Contributions given to individual people. Fees or dues paid to professional associations. Contributions to labor unions, chambers of commerce, or business associations. Contributions to for-profit schools and hospitals. Contributions to foreign governments. Fines or penalties paid to local or state governments. The value of your time for services rendered to a non-profit.
You'd have to check with a tax attorney or accountant on this. Time (in the US, anyway) isn't allowable as a donation. A physical object (say, a CD containing the files) may well be.
If your original contract does not state explicitly that you design was "work for hire," or makes no provision for transfer of copyright, then you own the copyright for your template design and they cannot use it without your permission. I don't know why you couldn't sell that copyright to them along with the files, and then donate the money back to them as a separate donation. Again, you would want to check this with your accountant, but I can't see why it would not be a valid deduction.