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Starting Your Business/Keeping Records Charitable contributions. Cash payments to charitable,religious, educational, scientific, or similar organizations may be deductible as businessexpenses if the payments are not charitable contributions or gifts. If the payments arecharitable contributions or gifts, you cannot deduct them as business expenses. However,corporations can deduct charitable contributions on their income tax returns. SeeCharitable Contributions in Publication 542bonnes affaires hotel Lagosfor more information. Individuals, partners in a partnership, or shareholders in an Scorporation may be able to deduct charitable contributions made by their business on theirindividual income tax returns. Inventory. You can take a charitable contribution deductionfor inventory items donated to a qualified charitable organization. Your deduction islimited to the fair market value of the property on the date of the contribution less anygain you would have realized if you had sold the property at its fair market value. Youmust remove from opening inventory for the year you make the contribution any costs forthe donated property included from prior years. These costs are not part of the cost ofgoods sold for determining gross income for the year of the contribution. Use them infiguring the basis of the donated property. However, you can include (as part of the costof goods sold) costs in the year of the contribution if you treat them as part of the costof goods sold under your accounting method. Do not use these costs to increase the basisof the donated property.
Publication 535 Business Expenses |
