HOW TO HELP
There are a few ways you can help us!
Donate your fresh produce to Farm Share Today!
FARM SHARE DEPENDS ON THE GENEROSITY OF FLORIDA FARMERS TO FEED OUR COMMUNITIES.
Farm Share devotes our resources to recovering excess products from manufacturers, wholesalers, growers, packers, distributors, supermarkets, and trucking companies. Benefits of food donation creates many benefits for your business and our community.
Food and Produce Donation Tax Benefits for Farmers, Manufacturers, Brokers, & Wholesalers
Under most circumstances a donor of produce or food to Farm Share can deduct up to a maximum of 200% of the Cost of Goods Sold related to their produce or food donation. Stated another way, a donor of produce or food to Farm Share can deduct the Cost of Goods Sold plus 50% of the expected profit up to 2 times the Cost of Goods Sold. See examples below.
Donors who use cash basis accounting do not need to track their expenses; instead the donors can estimate their Cost of Goods Sold to be 25% of the fair market value of the donated food.
The fair market value of the donated food can be established by reference to the selling price of similar goods moved to market at the time of the donation or in the immediate past. The fair market value is determined without reference to the failure of the food to meet the donor’s internal standards, lack of market demand or inability to ship products or similar circumstances that may have resulted in the donation in the first place. The fair market value is not decreased because the produce is oversized or misshapen or the food is otherwise rejected for cosmetic purposes so long as the food is safe for human consumption.
Donors may carry forward the tax deduction for donated food for a period of 5 years. Therefore, even if the donor is not having a profitable year in the tax year in which the donor made the donation the donation can be carried forward for 5 years and applied to the next profitable tax year.
The charitable deduction cap is 15% for donated food.
Both C corporations and non C Corporations can both take advantage of the tax deduction benefits for food donations under the Internal Revenue Code.
Selling Price (FMV) $10.00
25% of FMV $2.50 (.25 x $10.00 = $2.50)
Gross Profit $7.50
Tax Benefit $5.00 (2x the Cost of Goods Sold)
The Enhanced Deduction was capped at 2x the Cost of Goods Sold in the above example. The actual calculation was COGS($2.50) + 1/2 of the estimated profit ($7.50) = $6.25. $6.25 exceeds the 2x the Costs of Goods Sold cap set forth in the regulations and therefore, the Enhanced Deduction is reduced to $5.00.
Selling Price (FMV) $8.00
Gross Profit $3.00
Tax Benefit $6.50 (COGS($5.00) + ½ of gross profit($1.50) = $6.50)
In the above example the Enhanced Deduction is not affected by the 2x Cost of Goods Sold cap (2 x $5.00 = $10.00) and therefore, the full deduction can be utilized. The calculation is identical to the Cash Basis example except that in the Accrual Accounting method the actual Costs of Goods Sold is known and documented and therefore, need not be estimated.
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