Can I do this?

[agent4678]

I currently work in an industry that installs a product at a clients home and hauls the old unit away. If refurbished, these units are worth about $250 each. I would like to start a nonprofit, sell these items, and donate all of the money to local charities. The units are currently just thrown away, and I estimate that if the companies gave them to me, I would be gathering about 40 units per week from each company.

My questions are:
1. Who really owns the units and can the companies give them to me without reporting them as some sort of income for themselves?
2. The units are worth about $1200 new so can i give them a donation receipt for that amount or would it be the refurbished amount?

Thanks in advance. I am trying to make this as easy on them logistically as possible. Your help is greatly appreciated.

 

[army judge]

Of course you 'can' conduct this 'scheme'.
A better question is should you do it?
I'm of the opinion that your actual risk far exceeds your potential reward.

But, let's look at your scheme.

Who owns the old units?

The people who replace the old units with new ones own the old ones, unless they were leased items when originally installed.

Or, the old units may belong to the company that provides the new units.

The exact answer is probably buried in the sales documents/contracts.

You're not a nonprofit organization, yet!

If the units end up in your possession, you could be taxed for the transfer.

I'd abandon your "scheme".

Why?

It is fraught with tax difficulties for someone or many someones.

The tax authorities will come sniffing around as soon as word gets out.

You're also assuming that some sucker would want to shell out $250 for recycled junk.

 

[agent4678]

Thanks for the reply! I apologize if I made it sound like I am trying to do something shady here. I make a pretty decent living doing what I do, and would not gain anything financially from doing this. My thought is that I could help the environment as well as many of our local organizations by recycling/refurbishing something that is currently being thrown in the trash. Basically, if I could not refurbish the units then $250 is what the materials are worth when recycled. I have recycled many of them in the past, and am familiar with the process.

I guess a similar situation would be a large company that collects $3000 worth of cans over two years, and decides to give them to a non profit, instead of recycling them.

-Can that nonprofit give them a donation receipt, recycle those cans, and give all of the money to charity?
-Would the company donating the cans to the nonprofit have to show receipts for every can purchased?
-Is there a limit to how many cans they could donate?

Once again, thanks for your help.

 

[disagreeable]

The problem comes in where you are giving charitable receipts, for what is deemed scrap. The donor company must recognize the unit has value, before they can write it off as a charitable donation. The IRS may not like the process. If they gave them as scrap, just saving the cost of disposal, there should be no problem.

 

[agent4678]

So from what I'm gathering I could just ask the companies to set these items aside and let me pick them up without compensating them at all? Since the money would go to a good cause I'm sure some of them would do it. I'm just trying to make the process as easy and mutually beneficial as possible. I do not want to hinder their business in any way. I guess that would also save me the hassle of incorporating as a non profit(I'm Assuming). If I went this route, I would be essentially starting a scrapping company.

 

[disagreeable]

At the level you are doing it, I would consider it a hobby, with a charitable outcome.

 

[chal3oye]

I could not refurbish the units then $250 is what the materials are worth when recycled. I have recycled many of them in the past, and am familiar with the process.

I guess a similar situation would be a large company that collects $3000 worth of cans over two years, and decides to give them to a non profit, instead of recycling them.

-Can that nonprofit give them a donation receipt, recycle those cans, and give all of the money to charity?







________________
GuL on Post

 

[army judge]

I could not refurbish the units then $250 is what the materials are worth when recycled. I have recycled many of them in the past, and am familiar with the process.

I guess a similar situation would be a large company that collects $3000 worth of cans over two years, and decides to give them to a non profit, instead of recycling them.

-Can that nonprofit give them a donation receipt, recycle those cans, and give all of the money to charity?







________________
GuL on Post

When you start asking questions like that, you probably don't want to do the thing.

My main rule of life, DON'T COMPLICATE THINGS, OR YOUR LIFE UNNECESSARILY.