Question

Ordinary Income when assigning value to food pantry donations?

Forum|Forum|1 year ago
March 19, 2025
1 reply
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I have a large vegetable garden where I donate 100 % of the produce grown to charity (e.g. food pantries). I do not sell any of it, and it is not a business. I donated almost 5000 lbs of vegetables in 2024 worth about $9500 if I were to sell it at retail. I realize that I will need to file a form 8283. Two questions, as follows.

First, is this treated as Ordinary Income property when assigning a deductible value to it? I spent about $6000 growing it including expenses for property taxes, utilities, equipment maintenance, etc. (the garden is on an otherwise vacant piece of land with utilities for a barn and irrigation). Would I be able to deduct the full market value ($9500) or just the basis ($6000)?

Second, the form says an appraisal is needed if the value of the donation is over $5000. Getting an appraisal for vegetables, if even possible, seems silly. Is this really necessary or would it be waived in this case?

TIA for any insight anyone can provide.

Not A Product Question

O

Opus 17

You can't overcome the appraisal issue. No, it can't be waived. The IRS has stiffened the requirements recently, not loosened them, including requiring extremely specific and narrow language that the appraiser must attest to.

If you choose to claim a deduction of less than $5000, you are correct that you are limited to the basis -- what you invested in the donated property (the food). Or in other words, what you could have claimed as a business expense if you were selling the produce at a farmers market instead of giving it away. Are your records sufficiently reliable and detailed that you could file a business tax return if you were selling the items?