Following up on the question last week about the nondeductibility of a gift of use of a vacation condo, what if a restaurant is donating the food, the facility and the services to permit a charity to run a fundraising event? Is the donation of the food tax deductible?
Yes. The cost (not the value) of the food would be deductible by the donor. Donation deductions are permitted for gifts of tangible personal property such as food, computers or athletic equipment. A donor may not deduct for the value of services or use of facilities. If the donor is a corporation, there may be special rules for valuing the deduction. (See Ready Reference Page: “Corporations Have Special Rules on Contributions.”)