Business Question - GoFuckYourself.com

roseyrid · 04-28-2002, 05:53 PM

I have a question...which kind of makes me think about all businesses that donate 100% profit to charities...

Profit is defined as "The return received on a business undertaking after all operating expenses have been met"

With most businesses, the owners of a business control profit. Another words, they have to take salaries, pay employees, pay rent etc...

operating expenses can be defined as building leases, cars, salaries etc...

So all those television ads that say 100% of all profits will be donated.

My question is this "If a company brings in a $1,000,000. Lets say the total expenses for employees, building rent, everything comes to $100,000. Meaning there is a profit of $900,000. Can the owner declare $850,000 as a salary, making the profit only $50,000? On papers and in their book keeping I would say yes, but is this legal? He is donating 100% of the profits ($50,000), but again, who has say to what the profit is. Are there laws to stop this?

kind of makes you think...
any info would be appreciated.

-rosey

kmanrox · 04-28-2002, 05:55 PM

100% of my money is donated to the keep-k-man-happy fund....

Minte · 04-28-2002, 06:05 PM

the challenge of running any company is profit management,or more precisely...deferring taxes.The answer to your question,,is yes..the CEO or owner can manipulate net income to show as large or small of a profit that is required.Of course if he takes that percentage of the sales/profits..he is still liable for his own personal taxes..

aliveandlegal · 04-28-2002, 06:20 PM

Quote:

Originally posted by roseyatrid
Are there laws to stop this? -rosey

The question should be more like 'Who will ever bother to stop this'

People donate to worthless causes all the time. Even if someone tries to stop fraud, that costs the public money, so either way we all lose.

It's just one big game that never ends - people care more about themselves than they do the well being of our planet or others and that's just a sad fact we're forced to deal with.

Mr. Grimm · 04-28-2002, 06:22 PM

i am sure there are rules for designated non profit status. And salaries can be paid, hell the head of the red cross makes 6 figures.

but im sure there are rules. and everytthing is public record. just look at all
the info they are digging up about jessy jackson

04-28-2002, 05:53 PM	#1
roseyrid Confirmed User Join Date: Feb 2002 Location: LA Posts: 1,058	Business Question I have a question...which kind of makes me think about all businesses that donate 100% profit to charities... Profit is defined as "The return received on a business undertaking after all operating expenses have been met" With most businesses, the owners of a business control profit. Another words, they have to take salaries, pay employees, pay rent etc... operating expenses can be defined as building leases, cars, salaries etc... So all those television ads that say 100% of all profits will be donated. My question is this "If a company brings in a $1,000,000. Lets say the total expenses for employees, building rent, everything comes to $100,000. Meaning there is a profit of $900,000. Can the owner declare $850,000 as a salary, making the profit only $50,000? On papers and in their book keeping I would say yes, but is this legal? He is donating 100% of the profits ($50,000), but again, who has say to what the profit is. Are there laws to stop this? kind of makes you think... any info would be appreciated. -rosey

04-28-2002, 05:55 PM	#2
kmanrox aka K-Man Industry Role: Join Date: Oct 2001 Location: The Gutter Posts: 29,292	100% of my money is donated to the keep-k-man-happy fund.... __________________ Crypto HODLr Crypto mining Angel investor

04-28-2002, 06:22 PM	#5
Mr. Grimm Registered User Join Date: Nov 2001 Location: New Orleans Posts: 65	i am sure there are rules for designated non profit status. And salaries can be paid, hell the head of the red cross makes 6 figures. but im sure there are rules. and everytthing is public record. just look at all the info they are digging up about jessy jackson __________________ <a href="http://www.directnic.com>Directnic... 15.00 domain names, best customer support.</a>

04-28-2002, 06:05 PM	#3
Minte Babemeister Industry Role: Join Date: Jun 2001 Location: Madison Posts: 7,081	the challenge of running any company is profit management,or more precisely...deferring taxes.The answer to your question,,is yes..the CEO or owner can manipulate net income to show as large or small of a profit that is required.Of course if he takes that percentage of the sales/profits..he is still liable for his own personal taxes..