Donation of Business Assets

Technical topics regarding tax preparation.
#1
HowardS  
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S-corp client is closing his office and wants to donate his fully depreciated furniture to Habitat. Holding period greater than one year.
I think I'm correct in saying his charitable deduction will be limited to his adjusted basis, correct? Zero?
Is there any way to get a tax benefit from these donations?
Retired, no salvage value.
 

#2
sjrcpa  
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Correct - donation is limited to basis.
 

#3
CathysTaxes  
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I would think that the shareholder can distribute the assets at FMV to himself and then personally donate it. SCorp experts?
Cathy
CathysTaxes
 

#4
Nilodop  
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Absolutely he can, thereby trading an item of gross ordinary income in exchange for getting a charitable deduction if he itemizes.
 

#5
HowardS  
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Right...zero tax benefit.
Retired, no salvage value.
 

#6
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Nilodop wrote:Absolutely he can, thereby trading an item of gross ordinary income in exchange for getting a charitable deduction if he itemizes.


Yep, which potentially provides less than a wash if he doesn't itemize. Increased income with no increase in add'l deductions.
~Captcook
 

#7
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I dealt with a very similar issue on an S corp taxpayer who wanted to donate obsolete inventory to Habitat. I think there's a lot of misinformation regarding the superdeduction rules of general inventory that apply only to C corps.

CaptCook wrote:
Nilodop wrote:Absolutely he can, thereby trading an item of gross ordinary income in exchange for getting a charitable deduction if he itemizes.


Yep, which potentially provides less than a wash if he doesn't itemize. Increased income with no increase in add'l deductions.


This is absolutely correct.
 


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