Finance;

 

Think twice before you sell off your excess inventory at fire-sale prices. Under the new tax law, you might do better giving it to charity. That's because of a provision that allows C corporations to get substantial tax deductions for charitable donations of inventory items.

For example, say you manufacture rubber buggy bumpers, and you're stuck with an unexpected surplus. If you give them to charity, you can deduct the cost plus one-half of the difference between the cost and fair market value. So if it costs you $100 to make a buggy bumper that normally sells for $200, the deduction would be $150. (The deduction can't exceed 200% of cost, however.)

Kay Schwartz, a tax manager with the Flint, Mich., accounting firm of Dupuis & Ryden, notes that the rule does not apply to charitable donations of most other types of property. If you give away, say, an old computer, your deduction can't exceed the depreciated cost or its current market value, whichever is less. But if you have surplus inventory to unload, you may want to start looking around for an appropriate charity. There are two groups that specialize in matching donors and donees: The National Association for the Exchange of Industrial Resources, at (309) 343-0704; and Company/College Gifts-In-Kind Clearing-house, at (704) 892-7222.