Sole proprietor charitable contribution limitation?

[Connie]

I had a client call me today and ask if he could make more charitable contributions thru his business. He is a generous person and I want to make sure he doesn't go over any restrictions or limitations. Is there a limitation for someone that files a Schedule C? I have been searching the IRS website and haven't found anything yet to say what it is if there is one.... I have been looking at Pub 535 and 526 and haven't found anything to say if there is a percentage of profit or what. Perhaps I am missing it. Seems logical that there would some sort of limiation...

Thanks for your assistance!

[WhiteOleander]

A sole proprietor Sch C cannot take charitable deductions on Sch C. It must be deducted on Sch A. Subject to the same rules as anyone else.

He cannot reduce Sch C income or SE income with charitable contributions.

[Gene V]

From Pub. 334 page 40

Expenses You Cannot Deduct

You usually cannot deduct the following as business ex-
penses. For more information, see Publication 535

• Bribes and kickbacks.
• Charitable contributions.
• Demolition expenses or losses.
• Dues to business, social, athletic, luncheon, sport-
ing, airline, and hotel clubs.
• Lobbying expenses.
• Penalties and fines you pay to a governmental
agency or instrumentality because you broke the
law.
• Political contributions.
• Repairs that add to the value of your property or
significantly increase its life.

[JCH]

There are limitations for charitable contributions. However, all contributions are on his Schedule A. If you review Schedule C you'll see that there is not a separate line item for charitable contributions.

[jainen]

There is no limit

>>He is a generous person.... Is there a limitation for someone that files a Schedule C?<<

There is no limit. A generous person can donate as much as he wants, or at least as much as he has.

Taking a tax deduction for it is another matter, as the other posts have explained.

[jimmcg]

Can any proportional element of advertising benefit be associated with these expenditures? If so can it be justified, given the facts of each expenditure, and properly documented as such? Otherwise would agree with the above posts.

[MAMalody]

Can any proportional element of advertising benefit be associated with these expenditures? If so can it be justified, given the facts of each expenditure, and properly documented as such? Otherwise would agree with the above posts.

If part of this "donation" is to cover he cost of an advertisement in a church program of some type or along a sports field, then that portion could be advertising.

Mike

[Beth]

Sole proprietor charitable contribution limitation

If the business owner donates an item, can he take the retail value of the item, or must it be the wholesale value on the schedule A?

If he gets a mention in exchange for the donation on the program, can he still take the deduction?

Lastly, since written receipts are now required for donations, does the donation receipt need to be in the owners name, or can it be in the business name?

--a newbie and still learning!

[Jiggers]

Donation

If the business owner donates an item, can he take the retail value of the item, or must it be the wholesale value on the schedule A?

If he gets a mention in exchange for the donation on the program, can he still take the deduction?

Lastly, since written receipts are now required for donations, does the donation receipt need to be in the owners name, or can it be in the business name?

--a newbie and still learning!

If a business owner donates an item as a charitable contribution, then it is removed from his purchases/inventory at original cost and the deduction goes on Schedule A.

If a business owner donates an item as advertising, then you can reclassify from purchases/inventory at original cost to the advertising line. I usually just let it go as inventory disappearance. Same effect on Schedule C.

The sole proprietor's name is the business name for IRS purposes.