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The PATH act signed into law in December 2015 allows an enhanced deduction for food inventory. 

If a restaurant donates wholesome food to a 501 c(3) charitable organization, the value of the donation is not the retail price to the customer or the cost to you.  The value of the donation by law can now be the lessor of two times the cost or half of the mark-up plus the cost.

Example 1:  Menu item price is $10.00.  Cost is $3.00.  Mark-up is $7.00 ($10 –$3).  Half of mark-up is $3.50 (mark-up divided by 2).  Your deduction is the lesser of 2 X $3.00 = $6.00 or $3.50 + $3.00 = $6.50.

Example 2.  You donate vegetables which are not a menu item but cost $4.00.  Your deduction would be 2 X $4.00 = $8.00.

 

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