Certain contributions of inventory not eligible for enhanced deduction, IRS concludes

April 2014

Overview

In recently released Chief Council Advice (CCA) 201414014, the IRS concluded that a corporation was not eligible for the enhanced charitable deduction under Section 170(e)(3) for its donations of certain hair care and grooming products because they are ‘luxury items’ rather than 'necessities of life.

Any C corporation that makes donations of inventory for the care of the ill, the needy, or infants should consider whether this guidance raises concerns regarding their eligibility for the Section 170(e)(3) enhanced deduction.

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