Mr. Haugh owns a sporting goods store as a sole proprietorship. This year, he donated baseball equipment (bats, gloves, balls) to the local YMCA to use in their community sports programs. His cost basis in the inventory items was $45,700, and their retail value was $68,200. Which of the following statements about this donation is true?

Question

Quizplus · Accepted Answer

Mr. Haugh is allowed a charitable contribution deduction for the cost basis of the inventory items donated, which is $45,700. This is because, for tax purposes, businesses can deduct the cost basis of the inventory donated, not the retail value.

Mr Haugh Owns a Sporting Goods Store as a Sole