Discussion:Can charitable contributions be on schedule C?
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Discussion Forum Index --> Tax Questions --> Can charitable contributions be on schedule C?
| 25 April 2007 | |
| Uncle Sam just said at another discussion that charitable contributions can not be on schedule C? Is this the correct statement?
If I’m a sole proprietor and receive a letter from a charitable organizations on my business name, and I pay from my business account, is it wrong to include this expense into schedule C? If I donated my business computer, what is wrong with deduction it on schedule C? Now, a 1099-misc client with not mortgage, no real-estate tax, and Thanks God no medical expenses and other sch A deductions, asks me how he can deduct the car that he is using for business only, that he is about to donate. What advice would you give him? | |
| 25 April 2007 | |
| With a SP, I see it as first a conversion to personal use and then a personal gift to charity on Sch A. Depending upon if the vehicle were still in the recovery period, there might be recapture. | |
Death&Taxes (talk|edits) said: | 25 April 2007 |
| The computer and the car are only deductible to the extent of basis that remains. If the computer was 179ed you have nothing to deduct. Mom and Pop bakeries often would write checks to the local RC Church, but to advertise in the parish calendar. Thus any business donation should contain an element of advertising or have some other business purpose to it. | |
| 25 April 2007 | |
| I, too, find that many charitable contributions from a business could qualify as advertising (sponsoring a ball team, etc). | |
| 25 April 2007 | |
| Granted, if there is a clear economic benefit to the donor, then it is a deductible business expense. Based upon the tenor of the post, I don't see economic benefit. | |
| April 25, 2007 | |
| Either charitable, or advertising. Most of the time, in business, it's advertising. If it's not, then, no, you cannot take the charitable deduction on the Sch. C. Has to go to A. Even with pass thru entities, it isn't taken on the business, but passes thru separately for Sch. A. | |
| April 25, 2007 | |
| Dsglouise - See page 42, Publication 535.
Charitable contributions. Cash payments to an organization, charitable or otherwise, may be deductible as business expenses if the payments are not charitable contributions or gifts. If the payments are charitable contributions or gifts, you cannot deduct them as business expenses. However, corporations (other than S corporations) can deduct charitable contributions on their income tax returns, subject to limitations. See the Instructions for Form 1120 and 1120-A for more information. Sole proprietors, partners in a partnership, or shareholders in an S corporation may be able to deduct charitable contributions made by their business on Schedule A (Form 1040). | |
| 25 April 2007 | |
| I was taught many, many years ago that there is no such thing as a donation for a Schedule C. A donation is considered a personal donation, because of a sole proprietorship and can only be deducted on Schedule A. | |
| 25 April 2007 | |
| Under existing Treasury Regs, it is ok to run donations of purchased inventory through COGS, but only if the donation did not come out of beginning inventory. | |
| 26 April 2007 | |
| I always tell my clients that if they donate inventory that it's of no/little value to consider it a charitable contribution. When they do YE inventory the items are included in COGS. Riley2, could you please cite the TR? I'm not sure I follow "out of beginning inventory" and how you would distinguish in some/many cases. | |
