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PATH Act Food Donation Tax Deduction Calculator

The recent PATH Act extends tax code from IRC Section 170(e)(3) that allows food companies to receive an enhanced deduction from their taxes for the donation of food – up to twice their cost basis of the product. In many cases, charitable food donations will have higher economic value than liquidation.

In summary, a company that donates food to a 501(c)(3) organization such as a food bank or Feeding America may be able to deduct its cost basis plus one half of the profit that would have been recognized had it sold the product at fair market value – up to a maximum of twice the cost basis (limited to 15% of taxable income).
More detail here.

This calculator uses IRC 170 and PATH Act tax code to estimate your after-tax benefits of donating vs. selling excess food inventory. We’re always happy to run this for you if it gets a bit daunting. Just contact us and we’ll generate a report for you.

Note that this calculator is for illustration purposes only and you should not rely on this as a tax advice. You may wish to consult with your tax advisor to get a IRC 170 appraisal before making a tax-related decision on charitable donations.

THE PATH ACT CALCULATOR

Cases (quantity of goods) *

 

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Fair market value per case *

 

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Cost basis per case *

 

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Liquidation value per case *

 

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RATES

Federal tax rate

 

State tax rate

 

Selling costs

 

Annual donation budget

 

DONATION VS SELLING

RECOMMENDATION

SELL

Contact Us For More Information

Bullpen helps both larger and smaller food manufacturers quickly devise strategies for both inventory liquidation and for strategic giving. Please contact us to discuss your specific situation.

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