Hi Matt,Your question got forwarded to me--
In my years processing bike donations for BNB, I've had a few bike shops that seemed to care a lot about getting a tax donation receipt for their bikes, but from my knowledge of business tax law, I don't think it matters. Here's why:
A business has a "cost of goods sold" that they pay for their inventory. That number gets subtracted (along with other expenses) from their gross sales in order to arrive at a net profit figure, on which they are taxed. If they buy bikes (and never successfully sell them), that's automatically reflected in net profit that doesn't get realized.
And, on a related note- if the shop is donating bikes that they didn't buy, (i.e. customers abandoned them at the shop), they can't deduct the value of those either, because they have "no basis" in the bikes.
So if I read the question correctly, you want to approach this shop and regale them with all the benefits of donating these old bikes. Unfortunately, I don't think a reduction in tax liability is one of them.
And my disclaimer: I'm not a CPA... if you want to know for 100% sure, you'll have to check with one of them!Stephen
--
Stephen Bosco
Bike Donations Coordinator
Bikes Not Bombs
284 Amory St.
Jamaica Plain, MA 02130
p: 617-522-0222
f: 617-522-0922
On Thu, Oct 10, 2013 at 11:08 AM, Sarah Braker <sarah@bikesnotbombs.org> wrote:
Thought you might have some knowledge to share on this...
---------- Forwarded message ----------
From: Andrew L <breathingplanet@gmail.com>
Date: Thu, Oct 10, 2013 at 12:06 PM
Subject: Re: [TheThinkTank] Donations from Businesses
To: The Think Tank <thethinktank@lists.bikecollectives.org>
Andrewothers have never approached us.not sure.... good question!we get bikes on occasion from about 3 local shops and they have never asked or cared.
TBROn Thu, Oct 10, 2013 at 11:55 AM, Matt VanSlyke <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 VanSlykeUtica Bike Rescue714 Washington Street, Utica, NY 13502Learn. Earn. Ride.
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--Sarah BrakerCommunications ManagerBikes Not Bombs284 Amory St., Jamaica Plain, MA 02130Donate online to support our work!