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Also, by visiting our blog you will learn when and how organizations donating merchandise to NAEIR can earn an above-cost, federal income tax deduction, clear out warehouse space, avoid liquidation nightmares and help thousands of deserving schools and nonprofits

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Tuesday, September 27, 2011

Donating Excess Inventory for Tax Deduction



Are you aware that your corporation may be able to earn a federal income-tax deduction under Section 170(e)(3) of the Internal Revenue Code? If your corporation has unsold merchandise or other excess inventory on hand you may be able to donate it to a qualified charity — generally, a 501(c)(3) nonprofit organization.

National Association for the Exchange of Industrial Resources (NAEIR) is able to accept new donated items that include cancelled orders, returns, seconds, packaging changes, discontinued items and slow sellers. NAEIR is a nonprofit organization that collects donated merchandise from corporations and redistributes it to qualified schools and nonprofits.
Some noted factors for charitable giving include:
  • When you purchased the donated inventory item. If you donate an item you already had on hand at the start of the year, the charitable contribution deduction will be the item’s fair market value minus the amount that would have been “ordinary income” to you (that is, your profit) if you had sold the item at that fair market value. Your total charitable contribution deductions cannot exceed 10% of your taxable income for the year. If you donate a new item you purchased during the year, you can deduct the item’s cost. In this case, the deduction is not subject to the 10% limitation.
  • Whether the charity will use the item for its tax-exempt purpose. If that is the case and the item will be used solely for the care of the ill, the needy or infants, and your company is not an S corporation, you may qualify for an enhanced charitable contribution deduction. You can deduct the item’s fair market value minus one-half of the amount that would have been ordinary income to you if you had sold the item at that fair market value. The deduction cannot exceed twice the item’s “basis” (normally, the basis is the item’s cost). “Fair market value” is the price at which you otherwise would have sold the item — usually, the wholesale price for a manufacturer and the retail price for a retailer.
Consult your tax adviser for specifics because the requirements for charitable contribution donations are fairly complex. You can also get general information from NAEIR’s Web site, www.naeir.org, and a free guide on the subject by calling them at 1-800-562-0955

Monday, September 12, 2011

Ebenezer Presbyterian Church Helping Build Memories


From Ebenezer Presbyterian Church to NAEIR:

Again I want to thank NAEIR for having all the materials we needed for our Vacation Bible School.

Between you and the NASA Space Program we had the greatest "Out of this World" VBS. NASA sent us all the decorations and some handouts but through NAEIR's catalog and the Grab Bag I was able to get all of the kid's shirts, craft projects and specialty gifts.

Through your catalog we got the kid's Space Suits (sports shirts which they decorated in glow in the dark paint), wooden stars and moons, Astronaut cookie ornaments, "Rosie" the Jetson's maid ornaments, glow in the dark stones (moon rocks) and wooden picture frames.

Through the Grab Bag we got the kid's "flight bags" (red and black gym bags), their flight manuals (make your own story book kits), rulers, Moon calendars, a moon walk (using pit balls), glow in the dark planets (painted pit balls) and light-up moon & star necklaces.

When the kid's arrived the first night they were given their "flight bags" and when they left the last night their bags were filled, thanks to NAEIR.

Thank you again for helping make this a very memorable VBS, we like to call it "Building Memories".

God Bless to all of you who work for NAEIR.

Cecil and Sue Dunning
Ebenezer Presbyterian Church
Rockwood, Illinois



Wednesday, September 7, 2011

Representative Bobby Schilling Tours NAEIR


Representative Bobby Schilling (R-IL-17) visited NAEIR on September 1st to learn how gifts-in-kind organizations operate, and to discuss the proposal of legislation to provide an above cost income tax deduction to S Corporations for in-kind donations.  Expanding the enhance tax deduction could result in a substantial benefit for nonprofit organizations that benefit from the receipt of in-kind product donations.

Left to Right: Gary C. Smith - NAEIR President/CEO and Representative Bobby Schilling

Left to Right: Bob Clark - Director of Human Resources, Gary Smith, Rep. Schilling,
and Keri Anderson - Head of Receiving

Left to Right: Cruz Ramos - VP of Public Affairs, Gary Smith,
Paula DeJaynes VP of Corporate Relations, Rep. Schilling and Bob Clark