Tax (Headache) Time: Canada

After several discussions with CRA (the Canada Revenue Agency), I'm starting to finally get a grip on what I need to do this tax season with regards to my "volunteer" photography work. "Volunteer" is in quotes, as it isn't really true volunteer work.

This involves "barter" practices.

The situation is as follows: Our hockey association collects a $200 volunteer cheque from the parents of each child. If the parent doesn't perform ten hours of volunteer service for the association, the cheque is cashed at the end of the season. If the parents do all of the volunteer time, the cheque is returned at the end of the season.

There are two ways to look at this. Either my total time is worth $200 to the team, or it is worth $20/hour to the team. I'm unsure which route to go.

I need to determine the value of the services I've received from the other volunteers: who each wrote the same $200 cheque I did. Either their services are worth $200, or they're worth $20/hour. There are 15 children on the team, and none are siblings.

If everyone's time, regardless of the number of hours, is worth $200 everything comes out even. 200(1)=(200x14)/14

If we look at it based on an hourly rate, things go haywire. The coaches put in more time then I do, the managers (I'm guessing) put in around the same amount of time I do, and there are a whole bunch of parents who didn't do anything in 2013 (I assume they will in 2014). I could have a profit or a loss. I would need to consult with the parents individually to come up with the numbers.

I'm the only one who has volunteered professional services, so I'm the only one that is actually affected by any of this from a taxation point of view.

How should I handle this? $200 total value on my services, or $20/hour?

Thanks!

It's just volunteer work you're doing. The $200 you put down was just a bond to backup your promise of help.

Don't make life complicated for yourself. Do you think a tax inspector would relish the prospect of auditing the value of your volunteer activities?

Phil V wrote in post #16587939
It's just volunteer work you're doing. The $200 you put down was just a bond to backup your promise of help.

Don't make life complicated for yourself. Do you think a tax inspector would relish the prospect of auditing the value of your volunteer activities?

I've already spoken to CRA a couple of times about this, and it is the correct way to go about it: in addition to being very advantageous for me. If it wasn't going to be so advantageous to me, I wouldn't be doing it.

Edit: I should add that I get audited every couple of years, as I have some expenses that immediately raise audit flags. I've never had any issues beyond going through the audits. While annoying and time consuming, my ducks are always in a row. This one is a little weird though, and neither of the CRA agents I've spoken to were able to advise me on which would be the "correct" way to calculate the values. Presumably, neither way would be objectionable to them.

$20 per hour or $200 in total is irrelevant. What you need is a receipt for your "donation". What sets you apart from other volunteers is that you supply a "product" while the others supply time which is not a receiptable donation under Canadian tax structure.

Voaky999 wrote in post #16587967
$20 per hour or $200 in total is irrelevant. What you need is a receipt for your "donation". What sets you apart from other volunteers is that you supply a "product" while the others supply time which is not a receiptable donation under Canadian tax structure.

That isn't what I was advised. I was advised by CRA that in the event what I bartered was of less value than the services I received in exchange, that the difference would be taxable income.

There was no discussion of a receipt, however. I will put that on my list of things to discuss when I next speak to them.

neacail wrote in post #16587980
That isn't what I was advised. I was advised by CRA that in the event what I bartered was of less value than the services I received in exchange, that the difference would be taxable income.

There was no discussion of a receipt, however. I will put that on my list of things to discuss when I next speak to them.

I guess I am unclear what your goal is. Do you want to use your volunteer work as a tax deduction?

Voaky999 wrote in post #16588110
I guess I am unclear what your goal is. Do you want to use your volunteer work as a tax deduction?

Providing I concisely follow CRAs instructions, I have a lot of expenses that I can right off as result of my photographic work for the hockey team.

I'm just not sure about how to go about valuing the services exchanged. I'm leaning towards assigning a flat value of $200 straight across the board. It would be the simplest, but I don't know if it is fairest. The coaches do more work than I do, and I feel there is greater value in what they do as well.

neacail wrote in post #16588161
Providing I concisely follow CRAs instructions, I have a lot of expenses that I can right off as result of my photographic work for the hockey team.

I'm just not sure about how to go about valuing the services exchanged. I'm leaning towards assigning a flat value of $200 straight across the board. It would be the simplest, but I don't know if it is fairest. The coaches do more work than I do, and I feel there is greater value in what they do as well.

OK, that makes sense, I would make it all equal as well, CRA is not going to audit volunteer time so just go with the league minimum.

Voaky999 wrote in post #16587967
$20 per hour or $200 in total is irrelevant. What you need is a receipt for your "donation". What sets you apart from other volunteers is that you supply a "product" while the others supply time which is not a receiptable donation under Canadian tax structure.

Don, I believe this is what you are referring to and I think it only applies to registered charities. I know it doesn't apply in this instance but just wanted to clarify.

http://www.cra-arc.gc.ca …plcy/cpc/cpc-017-eng.html

Voaky999 wrote in post #16588187
OK, that makes sense, I would make it all equal as well, CRA is not going to audit volunteer time so just go with the league minimum.

Thank you. While my ego may not like this answer (I'm worth more than that! :lol, I think it is the most logical approach.

joeblack2022 wrote in post #16588235
Don, I believe this is what you are referring to and I think it only applies to registered charities. I know it doesn't apply in this instance but just wanted to clarify.
http://www.cra-arc.gc.ca …plcy/cpc/cpc-017-eng.html

That is good info to be aware of.

Just so people know exactly what part of income tax law is being applied here, it is as follows:

http://www.cra-arc.gc.ca/E/pub/tp/it4​90/it490-e.html

I wouldn't recommend anyone try to navigate it without consulting the CRA and/or a business accountant. I've always done my own taxes, but I may actually hire an accountant for this tax season as things could get a bit dodgy.

joeblack2022 wrote in post #16588235
Don, I believe this is what you are referring to and I think it only applies to registered charities. I know it doesn't apply in this instance but just wanted to clarify.

http://www.cra-arc.gc.ca …plcy/cpc/cpc-017-eng.html

Hi Joel, it would apply if the OP could negotiate a receipt from the minor hockey association as they would be a registered charity as most sports orgs are.

Voaky999 wrote in post #16588332
Hi Joel, it would apply if the OP could negotiate a receipt from the minor hockey association as they would be a registered charity as most sports orgs are.

Hmm I didn't realize that, I didn't think non-profit would necessarily fall under the same category as a charity. But I guess religious organizations do so that makes sense.

joeblack2022 wrote in post #16588346
Hmm I didn't realize that, I didn't think non-profit would necessarily fall under the same category as a charity. But I guess religious organizations do so that makes sense.

I speak with some certainty here as I have been involved with minor tennis for quite a few years and we are able to receipt donations from businesses

Voaky999 wrote in post #16588357
I speak with some certainty here as I have been involved with minor tennis for quite a few years and we are able to receipt donations from businesses

Thanks, that was my lesson learned for today.

I have been able to confirm that the hockey association is a non-profit organization. I haven't been able to confirm its status as a charity. The association does do what would be considered charitable activities for families within it, and it works for a couple of charitable funds ("Flames Even Strength Program" and the "Hitmen Charitable Fund").

According to this . . .

From http://www.cra-arc.gc.ca …vng/chrts/glssr​y-eng.html

. . . the association may not be a charity. Though I don't think being a non-profit association negates the possibility.

This warrants further investigation. I've been mulling over creating hard-copy calendars as a gifts for the parents . . . but the expensive involved has made me hesitant. A tax receipt would be a favourable thing.