CFP

By Investopedia AAA

Charitable Contributions And Deductions - Charitable Contributions by Business Entities

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

You May Also Like

Related Articles
  1. Several things factor into the salary of a financial advisor. Here's a look.
    Investing Basics

    How Much Does A Financial Advisor Earn?

  2. With a long list of risks, losses associated with foreign exchange trading may be greater than initially expected. Here are the top 5 forex risks to avoid.
    Economics

    Top 5 Forex Risks Traders Should Consider

  3. ISAs are financial instruments that allow students to raise funds to pay for their degrees by selling shares in their future earnings.
    Investing Basics

    Funding Higher Education With An ISA

  4. Top Ways to protect your purchases from credit card hackers or security breaches.
    Credit & Loans

    7 Ways To Protect Against Credit Card ...

  5. The Internal Revenue Service's new 2015 contribution limits for tax-deferred savings plans are higher; here's what you and your clients should know.
    Investing Basics

    New 2015 Contribution Limits: Advisors ...

Trading Center