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CalAttorney2
CalAttorney2, Attorney
Category: Business Law
Satisfied Customers: 10238
Experience:  I am a businesses law attorney, with experience advising and representing owners and investors.
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I have a small greeting card business and a lot of designs

Customer Question

Hello,
I have a small greeting card business and a lot of designs that did not sell and would like to move them. Is it best to donate them to charity or, can I simply toss/recycled them and claim them as a loss? If I were to donate, I would have to purchase about $800 worth of envelopes and then package them which would take a lot of time. I'm not sure if it would be beneficial unless the tax write off would be greater. Thank you for your input.
Submitted: 1 year ago.
Category: Business Law
Expert:  CalAttorney2 replied 1 year ago.

Dear Customer,

Unfortunately, the answer to your question is not a "one size fits all" general legal answer. You will want to speak with your tax preparer (accountant or CPA), or if you do your own taxes, you will want to run through your returns both with and without the write off.

The reason that you need to do this is that a deduction for a charitable donation does not affect all tax payers the same. For some taxpayers, (particularly those taking the standard deduction) the write off will not affect them at all. For other tax payers, the write off will not affect them as they do not have sufficient income to use the write off against (so if you have to go out and purchase an additional $800 worth of product to compliment your donation, you would need to ensure that this write off at least covers this cost), finally, some taxpayers will actually get the benefit of this write off, and it can be beneficial.

I hope the above explanation is helpful, and explains why I cannot give you a simple (donate vs. "round file").

IRS Charitable Donations Information Sheet: https://www.irs.gov/taxtopics/tc506.html

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