Charitable Contributions by Business Entities
C-Corporations - Corporations can report the amount of charitable donations on the Form 1120 (Corporate Income Tax Return). The amount of the deduction is based on the following criteria:

  • Ordinary Income property (inventory) - Deduction is limited to the basis in the property. Unless the property is computer equipment for schools, scientific equipment for universities or property for the care or illness of infants – then the corporation receives basis + half unrealized appreciation.
  • Capital Gain property (old equipment) - Deduction is the FMV of the property donated. Deduction will be limited to the property's adjusted basis for certain private foundations, and tangible personal property that is use-unrelated.

Limitations: The maximum allowable charitable deduction for a corporation is 10% of taxable income in any given year.

S-Corporations and Partnerships - The shareholders and partners will receive a Schedule K-1 detailing the allowable deduction. The individual can then report the deduction on their individual tax return.



Sample Questions 1 - 5

Related Articles
  1. Personal Finance

    Deducting Your Donations

    Generosity may be its own reward, but some charitable giving also provides personal tax benefits.
  2. Personal Finance

    An Overview Of Itemized Deductions

    Not taking the standard deduction this year could save you hundreds of dollars.
  3. Personal Finance

    How Does Depreciation Reduce My Tax Bill?

    How the depreciation tax rule can assist real estate investors.
  4. Personal Finance

    Do Your Research Before Claiming These Deductions

    Be sure to read the fine print about any deduction or credit that you’re planning to claim.
  5. Personal Finance

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
  6. Personal Finance

    What's a Deductible?

    With insurance, a deductible is the amount of money the insured pays out-of-pocket before the insurance company pays for the loss.
  7. Personal Finance

    5 Tax Moves To Make Before Year End

    Taxes aren't avoidable, but you shouldn't pay more than your fair share. Here are five moves you can make at year's end to lower your tax bill.
  8. Financial Advisor

    Increase Your Tax Refund With Above-The-Line Deductions

    Find out about these deductions and how you can use them to lower your tax bill.
  9. Retirement

    Non-Cash Contribution Rules Could Cut Returns

    Higher standards for certain contributions could mean smaller deductions for you.
  10. Financial Advisor

    Guiding Clients on Charitable Remainder Trusts

    Clients who wish to make donations to charity can reap an enormous tax deduction with charitable remainder trusts, but it must be set up correctly.
Trading Center