Just as an individual is allowed tax deductions for charitable donations, a business is afforded the same opportunity. A business’s charitable donations are a little different from an individual’s, though. A business can make three types of charitable contribution: services, cash, or property.
If a company contributes its services to a charity, it is not entitled to a deduction for those services, but can deduct non-reimbursed expenses incurred in rendering them. If a company contributes cash, it may deduct a contribution that is up to 50% of its adjusted gross income. If the company contributes appreciated property (a property that has experienced an increase in value), it is entitled to deduct the value of that property for that tax year.
Of course, determining the value of property donated as a charitable contribution requires an appraisal of that property. Defensible documentation of the property’s value is required by the IRS.
Present Value LLC is a full-service appraisal firm that can help you determine property value for tax purposes.
