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Start Increasing Your 2015 Tax Deduction Now

BY Gary C. Smith
December 31, 2014

If your business is like many retail-driven franchises, you have unwanted inventory hogging valuable storage space and putting a drag on your bottom line.

The good news is, there is a smart, easy way to turn that outdated stock into a hefty asset. One that doesn't involve profit-devouring discounts or liquidation hassles. It's called product philanthropy. And for franchises that hold C Corporation status, it's one of the best kept secrets of the IRS tax code.

According to IRC Section 170(e)(3), when C Corps donate their inventory to qualified nonprofits, they can receive a federal tax deduction equal to up to twice the cost of the donated products. And when companies donate their stock to a gifts-in-kind organization, they don't have to waste valuable staff time identifying deserving charities. These organizations are nonprofits that collect corporate product donations and then turn them over to pre-screened, qualified nonprofits. Basically, they do the legwork for you.

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