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Donation of Food Inventory

By Woods & Durham, Oct 3 2017 04:00PM

Any food inventory donated by a trade or business, including C corporations, is allowed an enhanced deduction, which is the lower of the cost basis plus one-half of the ordinary income recognized if the inventory would have been sold at its fair market value; or twice the cost basis of the inventory, assuming the following conditions are met:

• The donee must be a 501(c)(3) organization and the property must be in its exempt purpose solely for the care of the ill, needy or infants;

• The property is not exchanged by the donee organization for money, property or services;

• The donor receives a written statement from the exempt organization detailing that the property will be used to meet the requirements of this section;

• The food must be “apparently wholesome food,” which means that it is intended for human consumption and meets all quality and labeling standards;

• The deduction cannot exceed 10% of the taxpayer’s aggregate net income from all trades or businesses from which the contributions were made.

If you have food inventory that you would like to donate or you have already donated, contact us and let us help you with this process.

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