Donation Question

[littlelionspreschool]

Hello All,
I am fairly new to the daycare business as I opened in the summer of 2012. This year, I had an unusual circumstance in which a parent was diagnosed with cancer. The family had no insurance, so I decided to give their child free care to take some of the burden off their family around the holiday (gave free care for December 2013/January 2014). What I am wondering is, would I be able to use this as any kind of deduction for tax purposes? (maybe as a gift/donation?) My tax preparer is not very helpful!

[Michael]

Welcome to the forum.. I would think that those items, supplies, etc that you used for this child should be a deduction. Maybe Tom Copeland will lend his ear on this one. Tom is also having a tax webinar next month and you should join us.

https://www.daycare.com/forum/showthread.php?p=428507

[TomCopeland]

Originally Posted by littlelionspreschool

Hello All,
I am fairly new to the daycare business as I opened in the summer of 2012. This year, I had an unusual circumstance in which a parent was diagnosed with cancer. The family had no insurance, so I decided to give their child free care to take some of the burden off their family around the holiday (gave free care for December 2013/January 2014). What I am wondering is, would I be able to use this as any kind of deduction for tax purposes? (maybe as a gift/donation?) My tax preparer is not very helpful!

I commend you for your generosity. Unfortunately, you cannot claim this as a charitable deduction, either as a business or personal expense. The reason is because the family is not a tax-exempt charity. You can deduct the food, supplies you spent on this child. But, the money you didn't receive is not a deduction.

[littlelionspreschool]

Thank you Tom. I donated items for an auction for Festival of Trees where the proceeds went to the local Food Shelf. Would that be counted as a tax donation? If so, do I count the amount for the supplies of donated items or the price the items sold for? The reason I ask is the cost for the items was around $100 for all three items and they sold for $1,200! BIG difference