Let's suppose a business has a product that companies can subscribe to for $30/month. Can the business take a deduction for donating a subscription to a non-profit organization? (I suppose a web-hosting company would be a great example of the type of situation I'm thinking about.)
It's not a "service" in the sense that the cost is based on the number of hours worked -- yet it's not quite a tangible product the non-profit could hold in its hands.
2007-03-30 08:18:19 · 3 answers · asked by NS 2 in Business & Finance ➔ Taxes ➔ United States
No.
Here is a more tanglible example. Suppose a store buys widgets for $5 each and sells them for $20 each. One day they donate 5 widgets to charity ($100 worth).
They would get a deduction of only $25.00. The cost of the 5 widgets. The fact that they would normally sell for $100 is irrelevant.
In the same way, if you donate a service, your deduction is the cost to produce that service. In most cases: $0.00.
2007-03-30 09:02:41 · answer #1 · answered by Wayne Z 7 · 0⤊ 0⤋
The can only deduct the actual out of pocket costs related to the donation of the service. It most certainly IS a service in the example given.
2007-03-30 09:02:07 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Businesses can not deduct the value or selling price of donated in kind services. However, they still can deduct the costs of providing those in kind services as a regular cost of doing business.
2007-03-30 09:17:15 · answer #3 · answered by zudmelrose 4 · 0⤊ 0⤋