Charitable Contributions - Business

[geekgirldany]

S-Corp donated some signs for a charities golf tournament. Printing company and they printed the signs. He has a letter from the charity saying retail value is $1,000. Now what he paid out to have the signs printed is considered the contribution. So another $1,000 can not be put down as contributions. But he is saying some of the signs was to advertise his business. I've tried to find it but isn't there another way that it needs to be treated if it also advertised his business?

Geez does that make sense?

[Possi]

Advertising

If the signs advertised his business, isn't that advertising? It's one of those ways we can move it from charity to advertising... like giving away my business pens to a charitable organization...

[geekgirldany]

True. I think I am making it more difficult than it should be. Customer is wanting to deduct the $1,000 shown on the receipt but having a hard time explaining that he only gets to deduct the printing for the signs he provided to the charity.

[geekgirldany]

Maybe I am thinking of services here. If the taxpayer donates property (the signs) then the retail value/fmv is what would be deductible? but ordinary income property the fmv would be reducedby the amount that would be ordinary income if the property was sold.

Think I got it:
Ordinary income property. Property is ordinary income property if its sale at fair market value on the date it was contributed would have resulted in ordinary income or in short-term capital gain. Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined in chapter 14) held 1 year or less.

Amount of deduction. The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. Generally, this rule limits the deduction to your basis in the property

[ChEAr$]

maybe I'm confused

`but... just so that 1,000$ dosn't show up on the schedule K1.

[geekgirldany]

I was confusing myself Customer was wanting me to put $1,000 down as non cash contributions. After talking to him I was doubting myself and I found the information about ordinary income property. Basically he can only deduct the expenses he paid for making the sign. I was trying to find information on this that explained it a little better.

I am just tired and having a hard time today I think.

[dsi]

"Basically he can only deduct the expenses he paid for making the sign."

Excluding his labor.

[geekgirldany]

That's right. Thanks Dave.