Bruce Girrell on tue 6 jun 00
Several times now I've read here that the most that a potter could deduct
for a donated pot is the cost of the materials.
So... let's say that American Standard or Crane or Kohler had some bathroom
fixtures that were going out of style and they donated them to, say, a
school. Then the most that the company could claim on their taxes would be
the cost of the materials??? And they couldn't claim even that if they had
already deducted the cost of the raw materials of their business?
Is that really how it would work in corporate America? Is there anyone who
can answer how this really would work in a corporate environment? I just
have trouble believing that a large corporation that makes a donation of
significant value to a charitable cause would not have some sort of
mechanism for recovering at least some of their costs including glazing,
firing, and labor, if nothing else (administrative, storage, packing,
transportation).
Just how would it work in my hypothetical example? It's still clay that is
being reformed into a functional product. Where do the differences lie, or
are there none?
Bruce "just wondering" Girrell
and Lynne in Northern Michigan, back from Scotland and now off to Arizona on
vacation.
This time, Sara (the chocolate lab), gets to go. She loves to bye-bye and we
miss each other so much when we can't all go together.
Dewitt on wed 7 jun 00
At 16:39 6/6/00 -0400, Bruce Girrell wrote:
>Several times now I've read here that the most that a potter could deduct
>for a donated pot is the cost of the materials.
>
>So... let's say that American Standard or Crane or Kohler had some bathroom
>fixtures that were going out of style and they donated them to, say, a
>school. Then the most that the company could claim on their taxes would be
>the cost of the materials??? And they couldn't claim even that if they had
>already deducted the cost of the raw materials of their business?
>
>Is that really how it would work in corporate America?
Corporate America would deduct all cost associated with the product,
including material cost, energy cost, equipment depreciation, building
depreciation, direct labor, operational overhead, management/administrative
overhead, and any other cost they can assign to the product. Large
corporations have this down to an art, even though they play games when
assigning overhead to specific products. (Wanta make a particular product
look more profitable? - just assign it a lower percentage of the
manufacturing site overhead.)
The individual potter can deduct all this too, including the cost of
salaried employees. What you can't do is deduct the "potential" profit
that might have be realized if the product was sold.
deg
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