Benefits of Donations to your Company, Community and Planet

 WHY DONATE?

IT’S THE RIGHT THING TO DO: OUR PROGRAMS BENEFIT THROUGH INVENTORY DONATIONS for your Company, Community and Planet!

 Having a surplus of inventory  or any other class of assets is an issue that affects just about every successful company. This surplus or excess inventory takes up valuable warehouse space and can create various hidden expenses, such as insurance, maintenance, depreciation and even taxes.

Organizations who donate merchandise to Waste to Charity can clear out warehouse and retail space, earn federal income tax deductions and avoid liquidation nightmares.

When deciding whether or not to liquidate your stock, it is important to keep in mind that if you liquidate, you may be setting yourself up to be undermined with the selling of your own products. Discount houses may buy up your liquidated stock and compete against you, which can greatly affect your regular set prices. Instead, by donating your surplus inventory you can take advantage of federal income tax deductions, which could add up to twice the initial cost of the items. Donating simply makes good sense for corporations; not only does it make economic sense, but your generous contributions
give back to the society and community as a whole, offering a helping hand to those less fortunate. Waste to Charity provides organizations with the peace of mind that their donations will be handled by experienced staff who will get them to where they are needed most.

YOUR COMPANY WILL:

  • INCREASE YOUR RECOVERY ON EXCESS INVENTORY
    Don’t settle for scrap yard or surplus prices
    when you can get an enhanced tax deduction!
  • INCREASE YOUR MARKET EXPOSURE – Or Not ! 
    Waste to Charity actively works with your PR and marketing department- or stays silent- it’s entirely up to the donor!
    We’ll help to further enhance donations, by promoting goodwill with customers, vendors and employees. Everyone would rather make a difference!
  • INCREASE AVAILABLE WAREHOUSE SPACE  AND STOP WASTING YOUR EMPLOYEES TIME ON EXCESS PRODUCT.
    Free up valuable warehouse space when you donate your excess inventory.

CONTACT US!

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The US Congress provides incentives under the tax laws to encourage donation of inventory to non-profit organizations. These laws provide an incentive to businesses for donating slow-moving items prior to marking down the price. By donating items that today are collecting dust on a warehouse floor or a retail outlet shelf, donors can save the cost of other expenses related to maintaining the inventory, including the cost of warehousing, handling, and/or disposing of the items.

Internal Revenue Code, Section 170e3 even creates an enhanced deduction for corporations to take a deduction up to twice the cost of producing an item (when the value is higher than the cost).

Before the enhanced deduction was put in place, companies could only deduct an amount equal to their cost for an item donated to an IRS 501c3 public charity. However, the inventory or other property may have a fair market value higher than its cost. Under 170e3, an enhanced deduction allows the donor to take a deduction up to twice the cost/basis of the item if the value is higher than the cost.

Donated property under 170e3 must be used for the ill, needy or infant (using IRS definitions). Equipment used by a facility providing service to the needy also qualifies. The same acknowledgement requirements that apply for any donations still applies under 170e3 donations.How does the enhanced deduction under 170e3 work? Ask your tax advisor for the solution that best suits YOUR company. Please see a sample computation below and work with your accountant or tax advisor to see how you can benefit from donation of inventory!

Sample Computation:
Fair Market Value (Selling Price) =  $1,000
Basis (Cost to Company)= $ 200
Gain = (Difference between FMV (Fair Market Value and Basis, or “mark up“)= $ 800
Step 1: Determine the Gain
Fair Market Value $1000 – Basis $200= $ 800
Step 2: Reduce the deduction to not more than 1/2 the gain
Gain $800 x 1/2 = $ 400
Fair Market Value $1000 – 1/2 Gain $400 = $ 600
Step 3: The deduction cannot exceed twice the basis or cost
$600 – 2 x Basis (2 x $200 = $400) = $ 200
Step 4: Add the limitation in Step 1 to the limit in Step 2 and subtract from the fair market value to determine the deduction
$1000 – Gain ($400 + $200) = $ 400
Deduction = Twice the Cost

CONTACT US!

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