Examples: Donating Inventory to Waste to Charity
Please continue to scroll our page, there is more information here than meets the eye!
To donate Inventories to Waste to Charity, click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Tax Incentives for donating obsolete, closeout or liquidation inventory:
(Source: IRS.gov):
Congress provides incentives under the tax laws to encourage donation of inventory to non-profit organizations. These laws provide an incentive to businesses for donating slow-moving items prior to marking down the price. By donating items that today are collecting dust on a warehouse floor or a retail outlet shelf, donors can save the cost of other expenses related to maintaining the inventory, including the cost of warehousing, handling, and/or disposing of the items.
Internal Revenue Code, Section 170e3 creates an enhanced deduction for corporationsto take a deduction up to twice the cost of producing an item (when the value is higher than the cost). Before the enhanced deduction was put in place, companies could only deduct an amount equal to their cost for an item donated to an IRS 501c3 public charity. However, the inventory or other property may have a fair market value higher than its cost. Under 170e3, an enhanced deduction allows the donor to take a deduction up to twice the cost/basis of the item if the value is higher than the cost.
Donated property under 170e3 must be used for the ill, needy or infant (using IRS definitions). Equipment used by a facility providing service to the needy also qualifies. The same acknowledgement requirements that apply for any donations still applies under 170e3 donations. Though materials that are donated under 170e3 cannot be resold, organizations may charge a “user fee, handling fee, or donation fee” to recoup their expenses.
How does the enhanced deduction under 170e3 work? See the sample computation below and work with your accountant or tax advisor to see how you can benefit from donation of inventory. (Source: IRS.gov)
Sample Computation |
|
Fair Market Value (Selling Price) = |
$1,000 |
Basis (Cost to Company)= |
$ 200 |
Gain = (Difference between FMV and Basis, or “mark up“)= |
$ 800 |
Step 1: Determine the Gain |
|
Fair Market Value $1000 - Basis $200= |
$ 800 |
Step 2: Reduce the deduction to not more than 1/2 the gain |
|
Gain $800 x 1/2 = |
$ 400 |
Fair Market Value $1000 - 1/2 Gain $400 = |
$ 600 |
Step 3: The deduction cannot exceed twice the basis or cost |
|
$600 - 2 x Basis (2 x $200 = $400) = |
$ 200 |
Step 4: Add the limitation in Step 1 to the limit in Step 2 and subtract from the fair market value to determine the deduction |
|
$1000 - Gain ($400 + $200) = |
$ 400 |
Deduction = Twice the Cost |
|
The IRS allows a company to take up to half the gain (mark-up) on an item,
but not more than twice what the company paid for it. (Source: IRS.Gov)
Contact Waste to Charity.
You'll get an immediate response and an honest reply. If we can't help you, we'll help to find a solution for you.
Through the donation of obsolete, closeout or liquidation inventory, Waste to Charity acts as a charitable reverse logistics solution for US Businesses.
What is Reverse Logistics?
Reverse Logistics is the process of moving goods from their typical final destination (YOUR COMPANY'S USUAL SALES OUTLETS) to another point, for the purpose of capturing value otherwise lost or unavailable. Another use of reverse logistics is or for the proper disposal of your products.
In our experience, Reverse Logistic activities include:
The processing of returned merchandise for reasons such as:
Damaged inventory, whether damaged during transit, at your facility, or at a sales outlet. While these items will look worthless to a buyer expecting a brand new product, a damaged item is welcomed in Waste to Charity's inventory donation program. The less extensive the damage, the higher the deductible value.
Seasonal inventory which may not be suitable for next year's styles, or projected sales. When these items are sent to Waste to Charity's inventory donation program, they are valued between the purchase and transit price, and the usual retail price. Please see IRS Publication 561 "Determining The Value of donated Property” for further information regarding the exact method of valuation.
To donate Seasonal Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Restock inventory, which places a drain on man-hours, storage capacity and sales processes. These items are also welcomed in our inventory donation program, and similar tax incentives apply.
To donate Re-Stock Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Salvage inventory, which places your company in uncharted territory, and requires employees to focus on areas outside your current business plan, or their job description. Best to turn to the experts here, in our heavily biased opinion, Waste to Charity is your best bet!
To donate Salvage Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Excess inventory, where sales forecasts, or expectations exceeded results. We see more and more excessive inventory pile up in market sectors such as technology, where rapid changes are not always met with sales performance. These assets often quickly diminish in value, and the longer they stay in the supply chain, the less the return on these items become. The value of the items can be reclaimed in FULL, using our program, which is of no cost to your company. Your waste makes a difference in both the world, as well as your bottom line. By turning a problem item into a charitable contribution, your sales force can focus ion the best performing products you offer, and stop wasting time on items that refuse to sell.
To donate Excessl Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
RMA inventory, (Returned Merchandise Authorization) E-tailers, catalog companies, and now even big box stores watch these items pile up, or sell and liquidate them for pennies on the dollar. Again, these items can quickly diminish in value, and the longer they stay in the supply chain, the less the return on these items become. Liquidation may not be the best outlet for these items, depending on the item, the dollar amount gained through the liquidation process, and the percentage of reclaimed value which the liquidator will keep for their troubles.
To donate RMA Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
RGA Inventory, (Returned Goods Authorization) another term for RMA inventory, depending on the system of inventory and sales employed by your company. Returned goods are most often seen on the news one day a year, like clockwork you'll see a line on December 26th at the local Wal-Mart or shopping mall broadcasted by your local news outlet. Waste to Charity handles these items daily, and knows that RGA merchandise disposition is a serious issue for wholesalers, retailers, e-tailers, and catalog companies alike.
To donate RGA Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Surplus inventory is where too many items were purchased for this year's needs. The donation of surplus inventory is often the best way to reclaim the value on these assets, as liquidators will pay a pittance for them, and can be difficult to work with. Many of our donors use Waste to Charity for their entire entire surplus inventory, and move their sales team to focus on their most profitable products.
To donate Surplus Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Obsolete inventory, which may not be suitable for next year's styles, or projected sales. When these items are sent to Waste to Charity's inventory donation program, they are valued between the purchase and transit price, and the usual retail price. Please see IRS Publication 561 "Determining The Value of donated Property” for further information regarding the exact method of valuation.
To donate Obsolete Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Restock inventory, which places a drain on man-hours, storage capacity and sales processes. These items are also welcomed in our inventory donation program, and similar tax incentives apply.
To donate Restock Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Closeout Inventory where sales forecasts, or expectations exceeded results. We see more and more excessive inventory pile up in market sectors such as technology, where rapid changes are not always met with sales performance. These assets often quickly diminish in value, and the longer they stay in the supply chain, the less the return on these items become. The value of the items can be reclaimed in FULL, using our program, which is of no cost to your company. Your waste makes a difference in both the world, as well as your bottom line. By turning a problem item into a charitable contribution, your sales force can focus on the best performing products you offer, and stop wasting time on items that refuse to sell.
To donate Close-out Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Discontinued inventory comes to us most often from distributors, but can occur at the retail level as well. As customers become fickle about purchases, and new competitors arise, many companies choose to discontinue inventory at a faster rate than previously seen. The moment an item is discontinued, the question arises as what to do with it. If it is placed on sale at a retail location, many companies see these products selling, and the new inventories, on the shelves at a higher price become second in the customers mind. For this reason, the donation of these items becomes more appealing. Waste to Charity can help your company turn these items into a valuable deduction, save time and help to promote your company's image as an outfit that cares. We work closely with the financial and Public Relations departments of our donors, in order to maximize the PR value of these donations.
To donate Discontinued Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Liquidation inventory are two words a CFO never likes to see together. To a well organized company, this is a WORST case scenario, where losses seem inevitable. We offer a Solution as the donation of liquidation inventory is often the best way to reclaim the value on these assets, as liquidators will pay a pittance for them, and can be difficult to work with. Many of our donors use Waste to Charity for their entire surplus inventory, and move their sales team to focus on their most profitable products
To donate Liquidation Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Overstock inventory, where sales forecasts, or expectations exceeded results. We see more and more excessive inventory pile up in market sectors such as technology, where rapid changes are not always met with sales performance. These assets often quickly diminish in value, and the longer they stay in the supply chain, the less the return on these items become. The value of the items can be reclaimed in FULL, using our program, which is of no cost to your company. Your waste makes a difference in both the world, as well as your bottom line. By turning a problem item into a charitable contribution, your sales force can focus ion the best performing products you offer, and stop wasting time on items that refuse to sell.
To donate Overstocked Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
NFF No Fault Found, or No-Fault Found Returns , Items with the NFF designation can be extremely frustrating. These items are returned through RMA or RGA methods, and upon inspection, nothing is wrong with them. Although the product is fine, packaging may be open or worn dyuring shipping, and the product simply cannot be sold as "new". NFF return buildup places a drain on man-hours, storage capacity and sales processes. These items are always welcomed in our inventory donation program, and similar tax incentives apply.
To donate Restock Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Our programs can work for you, whether your issue is misshipped inventory, Insurance Claim inventory, Scratch and Dent inventory,
Missprints, misprints inventory, Factory Seconds inventory, Canceled Order inventory, refused Shipment inventory, And any other type of items, which used in the normal course of business are no longer effective in your sales system.
1. Waste to Charity will take the time to listen to your concerns, answer questions, and make this process easy!
2. The reconditioning, remanufacturing and refurbishing products; we have handled just about any commodity you can think of, and many you wouldn't think of.
3. The disposition of Obsolete equipment; we have worked with any type of factory equipment, injection molding machines, forklifts, haulers, ramps, conveyer systems, ingredients, etc. Please note- we work with businesses only on these items- as we need to work in bulk!
4. The recovery of business assets. We have helped businesses with all types of Asset recovery including: equipment, facilities, vehicles or technology. We Accept forklifts, Pallet Racking, Conveyer Systems, Scales, and Just about any type of business or industrial equipment.
Contact Waste to Charity. You'll get an immediate response and an honest reply. If we can't help you, we'll help to find a solution for you.
To donate Discontinued Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Join us. Make YOUR Waste make a Difference!
PROGRAMS AND BENEFITS OF INVENTORY DONATIONS
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INCREASE YOUR RECOVERY ON EXCESS
INVENTORY
Don’t settle for scrap yard or surplus prices when you can get an enhanced tax deduction!
PROTECT YOUR MARKET INTEGRITY FROM
SURPLUS DEALERS
Even inventory sent to the scrap yard can end up in the hands of surplus dealers, competing with you and your customers. Donation offers protection from this.
INCREASE YOUR MARKET EXPOSURE
Waste to Charity actively works with your PR and marketing department
to further enhance donations, by promoting goodwill with customers, vendors and employees. Everyone would rather make a difference!
INCREASE AVAILABLE WAREHOUSE SPACE
Free up valuable warehouse space when you donate your excess inventory.
To donate Discontinued Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm
Future Programs
Let's face it: society has a Myriad of challenges and concerns, and we shouldn't rely on the Government to solve all of them. Waste to Charity's agenda is to focus on agencies helping children and families in need, as well as environmental groups as our organization grows and becomes economically self-sufficient, so will our programs. As these operations mature, our organization will be further empowered to expand our outreach efforts.
Inventory management is a primary concern to most large companies, and the problem of how best to deal with excessive inventory is considered so complex that entire books have been written on it by numerous business experts of varying credentials. The majority of these books counsel businesses not only on how best to reduce their inventory to the bare minimum, but on finding ways to maximize the profit potential of excessive inventory. The tried and true process of merely selling off the merchandise for whatever price can be gotten is flawed, simplistic, and obsolete.
In many industries, from the manufacture and distribution of high-end technology components to that of milk and cookies, the relative costs of excessive inventory are consistently high, particularly when valuable products steadily depreciate or expire altogether. In other fields, the inordinately high cost of stock outs or any perceived dip in customer service are so important, the maintenance of a high level of safety stock seems mandated, which only exacerbates the excessive inventory problem.
Businesses with high levels of customer service or differentiation capabilities are usually unable to keep pace with the inventory produced by higher volume, low cost producers. Still, all businesses, regardless of their inventory management structure, share a similar burden when confronted with the time-sensitive issue of dealing with excessive inventory. The most feasible response would be to simply release the merchandise to charitable organizations.
Giving excessive inventory items to charity organizations offers companies significant tax benefits, not to mention a groundswell of positive public relations. Dealing with charity organizations is much easier and potentially friendlier than negotiating with an agency whose sole purpose is to gouge you for as much as possible. Finding a better use for excessive inventory merchandise, either from a business or a moral perspective, seems unlikely.
To donate Discontinued Inventories to Waste to Charity, just click the appropriate link:
1. Non-Food Inventory http://www.wastetocharity.org/non_food.htm
2. Food Inventory http://www.wastetocharity.org/food.htm |
