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PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4152
Experience:  35 years tax experience, including four years at a Big 4 firm.
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Hi - I am considering applying for a bank loan to purchase

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Hi - I am considering applying for a bank loan to purchase food for a soup kitchen I am holding. The event is for charity, so I was curious, would I be eligible to receive a tax credit on this loan when I file my return next year? (for the full amount of the loan and/or any taxes incurred in the food purchase)

Please advise...

Mike Quatro

PS I reside in Ohio, but the event will take place in South Dakota.

PDtax :

Welcome to the site. I'm PDtax, and will be helping you today. The answer is probably yes, but there are some additional questions I'd ask before I could say yes. And, it's a tax deduction, not a tax credit, that may be in play.

PDtax :

If you are operating the soup kitchen, do you use a charitable organization, or are you doing this yourself?

PDtax :

Are you a member of the ministry or clergy?

Customer:

I am operating it with two other people, but none of us are associated with a charity organization or nonprofit. I am also not a member of the church.

PDtax :

Are you paid at all for your efforts?

Customer:

No

PDtax :

Then I would say you could claim a charitable donation for the cost of the food. Save your receipts, and keep records of your event to support the deduction.

Customer:

OK...and just to clarify, it doesn't matter that I reside in a different state than the event is held, correct?

PDtax :

no, state of residence won't matter.

Customer:

OK, thanks so much. That was very helpful!

PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4152
Experience: 35 years tax experience, including four years at a Big 4 firm.
PDtax and 2 other Tax Specialists are ready to help you
If your goal is a legitimate tax deduction, then you must be giving to a qualified organization. Also, you cannot deduct contributions made to specific individuals, political organizations and candidates.Although the actions are charitable the cost of the food would not be a deduction. This would not be a charitable deduction because the original expert specifically asked if they were associated with any charity and the answer was no. These are just very nice people doing something good but it would not be a charitable deduction for tax purposes.