Writing Off As Gifts

Business By smokeysmokerton Updated 16 Apr 2010 , 6:15pm by Shadylady78

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smokeysmokerton Posted 16 Apr 2010 , 10:32am
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I'm not sure if this is the right place for this question, so if not, my apologies.

I haven't been decorating cakes/cookies for very long, but I did a cookie bouquet for a vendor at work as a thank you, and it was great because I really hate to waste cookies/cake, but I really need the practice. Anyway, I noticed when I was doing my taxes recently that you can write off business gifts. Does anyone know if this counts?

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MnSnow Posted 16 Apr 2010 , 2:02pm
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I'm not sure. My tax guy says if it's a donation for a charity, it can be wrote off

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Shadylady78 Posted 16 Apr 2010 , 2:58pm
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It can be deducted as a business gift. You can deduct the cost of the item up to $25 per person the gift was intended for. I would suggest talking to your tax professional regarding the full details. I am a tax professional, however I do mostly personal taxes.

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indydebi Posted 16 Apr 2010 , 4:27pm
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I almost hate to post this because I *SO* don't have all of the details, but somewhere along the line I got in my head that gift or donation write offs can only be for the ingredient costs and not the retail value?

However, to conflict with that statement, I did donate a few cakes to *charity* organizations and they gave me a letter confirming the donation with their non-profit ID# so I could write the full value of the cake off (they listed the value of the cake in their "receipt", which was the letter).

So I'm asking any accounting CC'ers if they have any add'l info. Is donations to a charity handled different than donating a cake as a thank you or donating a cake for a friend's baby shower? Is the difference whether the receiver has a non-profit ID?

Looking for answers myself on this one. thumbs_up.gif

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Shadylady78 Posted 16 Apr 2010 , 6:15pm
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If it is not for a qualified charity it is considered a gift. With charitable contributions, the amount that can be deducted is related to "fair market value", as well as what is donated. There are special rules used with food products. I would suggest if in the US going to www.irs.gov and checking out publication 526

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