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Question

I'm retail clothing store and have an incredible amout of overstock. It's all brand new with the tags. What dollar percent would I receive if I donated this to a charity?

Submitted: 941 days and 15 hours ago.
Category: Tax
Value: $15
Status: CLOSED

Accepted Answer

Generally the amount of noncash charitable contribution is the property's fair market value at the time of the contribution less the amount that would be ordinary income. Such property includes inventory and stock in trade. Your overstocked clothing would fall into this category. In my opinion, in your situation, the best thing would be to deduct the cost of the items as a contribution. Make certain that you don't also record these items as part of your Cost of Goods Sold. You can't deduct them in both places.

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Expert: Wayne Brasch
Pos. Feedback: 99.6 %
Accepts: 999
Answered: 8/21/2007

Accountant and Business Consultant

Master of Science in Taxation. Tax experience since 1963.

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