Tax Benefits
Calculating the Value of Your Food Donation
When donating food, your tax deductible donation may be up to twice the cost of the food.
Below is a summary of how to calculate the value of your food donation. Refer to IRS Pub 526 for complete details.
Your tax deductible donation is the lesser of:
a. twice the Cost of the food, or
b. the Cost of the food plus half the Profit (that you'd have realized had you sold the food)
Example 1
Sell Price = $4.00
Store Cost = $1.00
a. 2 x Cost = 2 x $1.00 = $2.00
b. Cost + 1/2 of Profit = $1.00 + $1.50 (1/2 of $3.00) = $2.50
The lesser value is $2.00, this would be the value of the donation for Example 1
Example 2
Sell Price = $4.00
Store Cost = $3.00
a. 2 x Cost = 2 x $3.00 = $6.00
b. Cost + 1/2 of Profit = $3.00 + $0.50 (1/2 of $1.00) = $3.50
The lesser value is $3.50, this would be the value of the donation for Example 2
