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Old 02-27-2009, 06:08 PM
CoraSys CoraSys is offline
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Exchange versus expense for fundraising functions

I read somewhere that if you put on a dinner and people come and pay for the dinner, the actual cost of the dinner is not a fundraising expense, but needs to be entered as an "exchange". The costs of advertising and "conducting" the dinner are fundraising expenses, however.

Has anyone run into this, and if so,
1. how did you break out the exchange part from the rest of the expenses?

2. What's the difference between the exchange portion and the expense of "conducting" the event?


Thanks,
Gretchen
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Old 02-28-2009, 11:12 AM
David Palmer David Palmer is offline
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I have two points to make:

1. For receipting of payments for a dinner, payment for the cost of the meal is NOT receipted as a donation. It is payment for something received. Any payment in excess of the cost of the meal is receipted and recorded as a donation.

2. It is my understanding that all revenues for such an event are offset against all costs of the event and the net, gain or loss, is recorded as a line item on audited financial statements. Any CPA's out there for comment?
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  #3  
Old 06-08-2009, 05:10 AM
Apostile Apostile is offline
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Exchange versus expense for fundraising functions

Generally, if you are registered for GST and you are selling tickets to a fundraising dinner or similar function in the course of your enterprise, you must pay GST on the tickets you sell. The purchasers of the tickets may be able to claim a GST credit if the expense is deductible for income tax purposes.

An enterprise covers commercial activities but does not include hobbies or employment. For GST purposes an enterprise is:
Apostile
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