Matt-
There is an IRS working paper on in-kind donations here: http://www.irs.gov/pub/irs-tege/eotopice94.pdf
It's rather old, but probably the principle is the same. It appears that if the goods can be classified as stock (merchandise that was originally purchased for retail sale), then the donating corporation may at a minimum deduct their own cost (not the retail value)--up to a total that is some proportion of the donating corporations total income (I think it was 10%; unlikely that this would present a problem for any reasonably sized business).
In other words, yes they can get a deduction for the contribution (providing your org or agent is a 501c3 of course).
The only question will be how they document the value for the IRS (if they ask?). If they actually paid for the bikes, then any documentation they have from those purchases should suffice.
I'm not an accountant, but I play one on the internet.
Eric
ThinkTank, I have been trying to research this and I'm not really finding a complete answer. Perhaps some of you have personal experience/knowledge that can help. There is a bike shop in my City that has a stockpile of used bikes in a warehouse and they've expressed some interest in donating them to our community bike shop. Does anyone know specifically what the tax advantages are for the business that donates? I know how it works for individuals but I don't know how it works for a business.
Does anyone have epxerience with this?
From: thethinktank-bounces@lists.bikecollectives.org [thethinktank-bounces@lists.bikecollectives.org] on behalf of Angelo Coletta [summitcyclingcenter@yahoo.com] Sent: Friday, October 18, 2013 7:45 PM To: The Think Tank Subject: Re: [TheThinkTank] Donations from Businesses
I have the viewpoint that if an entity is NOT tax exempt (501c3), donations are treated as income by the non-profit and the donor can not deduct the value on their tax return. When donations are sold, then the question is was it sold for market value, below or above? A non profit can have taxable income if they do indeed have a real profit. Even those who have tax exempt status can be taxed for UBIT(Unrelated Business Income Tax), if they sell things that are "unrelated" to their mission. Angelo
On Thursday, October 10, 2013 3:47 PM, Matthew VanSlyke vanslyke.matthew@gmail.com wrote: Seems that the lesson learned here is....ask a pro when it comes to taxes. Thanks All. -Matt
On Thu, Oct 10, 2013 at 3:38 PM, Lesa Franz <gadget_teer@yahoo.commailto:gadget_teer@yahoo.com> wrote: they need to talk with there tax accountant
Lesa Franz Coatesville Community Bike Works
Sent from my iPad
On Oct 10, 2013, at 3:25 PM, Steven Bradley <stevencbradley@gmail.commailto:stevencbradley@gmail.com> wrote:
I'm not a CPA, Matt, but I'm pretty certain they can take actual value for their donations. Suggest an appraisal or other 3rd party valuation, though.
Sent from my iPhone
On Oct 10, 2013, at 8:55 AM, Matt VanSlyke <matt@uticabikerescue.orgmailto:matt@uticabikerescue.org> wrote:
ThinkTank, I have been trying to research this and I'm not really finding a complete answer. Perhaps some of you have personal experience/knowledge that can help. There is a bike shop in my City that has a stockpile of used bikes in a warehouse and they've expressed some interest in donating them to our community bike shop. Does anyone know specifically what the tax advantages are for the business that donates? I know how it works for individuals but I don't know how it works for a business.
Does anyone have epxerience with this?
Thanks, Matt
-- Matt VanSlyke Utica Bike Rescue 714 Washington Street, Utica, NY 13502 315.525.9554<UrlBlockedError.aspx> matt@uticabikerescue.orgmailto:matt@uticabikerescue.org http://www.uticabikerescue.org/ www.facebook.com/uticabikerescuehttp://www.facebook.com/uticabikerescue Learn. Earn. Ride. _______________________________________________ Thethinktank mailing list Thethinktank@lists.bikecollectives.orgmailto:Thethinktank@lists.bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.orgmailto:TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit: http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o... _______________________________________________ Thethinktank mailing list Thethinktank@lists.bikecollectives.orgmailto:Thethinktank@lists.bikecollectives.org To unsubscribe, send a blank email to TheThinkTank-leave@bikecollectives.orgmailto:TheThinkTank-leave@bikecollectives.org To manage your subscription, plase visit: http://lists.bikecollectives.org/listinfo.cgi/thethinktank-bikecollectives.o...
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