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mattcanova
Level 1
January 10, 2021
Question

how to record an S Corporation who donates a by product it makes to a charitable organization

  • January 10, 2021
  • 3 replies
  • 25 views
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3 replies

qbteachmt
qbteachmt
Level 15
January 10, 2021

The costs of materials and labor (basis) are already documented as business expense. What they did is forfeit the sale. It's the same concept as waste or damage, really. You don't get to write off the lost sales price as if that is donation.

Food donation has some new provisions.

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    IRonMaN
    IRonMaN
    Level 15
    January 10, 2021

    But to be technically correct, those costs should be moved from cost of goods sold to donations.  Which means if the shareholders don't itemize, they may have generated a nondeductible expense for themselves.

    Slava Ukraini!
      qbteachmt
      qbteachmt
      Level 15
      January 10, 2021

      "they may have generated a nondeductible expense for themselves."

      Which is why I tell my clients to manage things as Promotional giveaways, and not charity.

      Don't yell at us; we're volunteers
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