Beneficial extension of 'enhanced' deduction for charitable contributions of food inventory

Private Company Services Tax Insight

The American Taxpayer Relief Act of 2012 (ATRA) retroactively extended the Section 170(e)(3)(C) 'enhanced' deduction for qualifying charitable contributions of food inventory made by taxpayers that are not C corporations (e.g., partnerships, S corporations). This deduction had expired at the end of calendar year 2011, but the ATRA retroactively extended it through calendar year 2013, providing another opportunity for taxpayers that are not C corporations to obtain a greater benefit for their charitable contributions. While many taxpayers will be able to take advantage of this opportunity, some taxpayers may discover that they are unable to efficiently capture the information necessary to document and support the enhanced deduction. If a taxpayer cannot efficiently capture the information necessary to document and support the enhanced deduction, the taxpayer should consider employing statistical sampling, an IRS pre-filing agreement, or both in order to streamline the process.



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