Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 16

TAX TIME

POSITIVE
GIVING
DONATING SURPLUS INVENTORY HAS TAX
ADVANTAGES. BY GARY C. SMITH

One of the biggest tax secrets is hiding in plain sight
in warehouses across the
country. It's excess inventory. A perennial problem for
anyone who sells goods of
any kind, surplus or obsolete inventory can provide a
great tax benefit to C Corps
16 www.wdimagazine.com Volume 5, Issue 1

who take advantage of a little-known piece of tax code:
Internal Revenue Code Section 170(e)(3). This code
is probably one of the best
kept secrets of corporate
tax law, but it provides the
key to one of the best ways
to dispose of unprofitable

inventory - donating it. Besides boosting your bottom line, donating surplus
inventory boosts your company's image
by helping people in need.

GIVING IS RECEIVING
Under 170(e)(3), when a C Corp donates
its excess inventory to qualified nonprofits, it can receive a federal tax deduction
equal to up to twice the cost of the donated products.
In other words, according to the tax
code, deductions are equal to the cost of
the inventory donated, plus half the difference between the cost and fair market-selling price, not to exceed twice the
cost of the item.
For example, if your product cost $10
and you sell it in store for $30, the difference is $20. Half of $20 is $10. A $10
product cost plus $10 - half the difference
between cost and fair market selling price
- would net a $20 deduction.
Since $20 does not exceed twice the
product cost, it does not exceed the maximum allowable deduction. So instead of
selling that surplus merchandise for pen-


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Table of Contents for the Digital Edition of Wholesale & Distribution International 2018 - Volume 5, Issue 1

Table of Contents
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - Cover1
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - Cover2
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 1
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - Table of Contents
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 3
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 4
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 5
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 6
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 7
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 8
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 9
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 10
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 11
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 12
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 13
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 14
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 15
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 16
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 17
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 18
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 19
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 20
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 21
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 22
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Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 31
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Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 38
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Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 42
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Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 45
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 46
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 47
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Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 49
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 50
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 51
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 52
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 53
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 54
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 55
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - 56
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - Cover3
Wholesale & Distribution International 2018 - Volume 5, Issue 1 - Cover4
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