Can my small business deduct meals donated to a 501(c)(3) charitable event?

Thanks for the response! This is really helpful, but I'm still a bit confused. In our case, we catered lunch for all the attendees of the charity's fundraising event. Our company logo was displayed as a sponsor, but the primary purpose was supporting the charity. Would this fall more under Section 170 or Section 162?

If your company was recognized as a sponsor with logo display, you're likely looking at a dual-purpose expenditure. The meals could be partially considered a Section 162 business expense (advertising/promotion) and partially a Section 170 charitable contribution. Since you received some advertising benefit from the sponsorship, you'd need to determine the fair market value of that benefit and subtract it from your total contribution to find the charitable deduction portion. This is addressed in Section 170(f)(8) regarding substantiation requirements. Make sure you get documentation from the 501(c)(3) that specifies the value of any benefits received in exchange for your contribution.

Does it actually give you the specific IRS code sections? Or is it more general advice? My accountant keeps telling me different things about our restaurant's food donations, and I need something concrete.

I'm skeptical about these online tools. How does it know which section applies without knowing all the details of the business relationship with the charity? Like whether there's quid pro quo or just straight donation?

It gives you the specific code sections that apply to your situation after analyzing your documents. It breaks down whether you're looking at a pure charitable contribution or a business expense with promotional value. For restaurant donations, it distinguishes between regular inventory donations and qualified food donations, which have different rules. It will cite the enhanced deduction rules under Section 170(e)(3) if your donation qualifies.

How does this actually work? I've spent hours on hold with the IRS before giving up. Do they just keep calling for you or something?

Yeah right... I'm supposed to believe some service can magically get through the IRS phone system when everyone knows it's literally impossible? And then they actually give you correct information? The same IRS that gives different answers depending on who you talk to? I'll believe it when I see it.

They use technology that continually redials and navigates the IRS phone system for you. When they secure a place in line with an agent, they call you to connect. You don't have to sit there listening to hold music for hours. The key with getting accurate IRS information is asking very specific questions. I had all my documentation ready and asked precisely about business meal donations to a charitable event with sponsorship recognition. The agent cited the exact sections of the tax code and explained how to properly allocate between business expense and charitable contribution.

This is really detailed, thanks! Do you know if there's a specific form or documentation we need from the charity to prove this was a legitimate donation? My boss is very particular about having everything properly documented.

You'll need a contemporaneous written acknowledgment from the 501(c)(3) that includes: - Description of donated items - Date of contribution - Statement that no goods or services were provided in return OR a good faith estimate of the value of any goods/services provided to you (like the sponsorship recognition) For larger donations (over $250), this documentation is absolutely required to claim the deduction. If your donation was over $5,000, you might also need to file Form 8283.

That's a really interesting approach I hadn't thought about. I wonder if that would work if only a few employees attended but the meals were for all event attendees? Seems like it might only apply to the portion consumed by your employees.