When it comes to a charitable donation, a business is afforded the same opportunity as an individual – to take a tax deduction for it. Generally, an individual’s donations will be in the form of everyday items – used clothing, old toys, outdated furniture, and so forth. But a business’s charitable donations are a little different from an individual’s. A business can make three types of charitable contribution: services, cash, or property.
- If a company donates its services to a charity, the company is not entitled to a deduction for those services, but is allowed to deduct non-reimbursed expenses incurred in rendering them.
- If a company contributes cash, it may deduct a contribution that is up to 50% of its adjusted gross income.
- If a company contributes appreciated property (a property that has experienced an increase in value), it is entitled to deduct the value of that property for that tax year.
Of course, since defensible documentation of the donated property’s value is required by the IRS, an appraisal of that property is necessary. A Certified Machinery and Equipment Appraiser (CMEA) is best qualified to perform such an appraisal.
The NEBB Institute endorses and strives to observe the highest standards of professional ethics to preserve the public trust inherent in the professional appraisal practice. The Institute provides initial and monthly comprehensive education, ongoing support, and a dynamic international network, and certifies professionals in the art of machinery/equipment appraisal and brokerage.
By: NEBB Institute
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