Extension and expansion of charitable deduction for contributions of food inventory

The Protecting Americans from Tax Hikes Act of 2015 reinstates and makes permanent the enhanced deduction for contributions of food inventory for contributions made after December 31, 2014. For taxable years beginning after December 31, 2015, the Act modifies the enhanced deduction for food inventory contributions in the following ways:

First, the 10% limit on charitable contribution deductions by corporations are made subject to a limitation of 15% of taxable income. The general ten-percent limitation for a corporation does not apply to these contributions, but the ten-percent limitation applicable to other contributions is reduced by the amount of these contributions. Qualifying food inventory contributions in excess of these 15-percent limitations may be carried forward and treated as qualifying food inventory contributions in each of the five succeeding taxable years in order of time.

Second, in the case of any contribution of apparently wholesome food which cannot or will not be sold solely by reason of internal standards of the taxpayer, lack of market, or similar circumstances, or by reason of being produced by the taxpayer exclusively for the purposes of transferring the food to an organization described in section 501(c)(3), the fair market value of such contribution shall be determined (1) without regard to such internal standards, such lack of market or similar circumstances, or such exclusive purpose, and (2) by taking into account the price at which the same or substantially the same food items (as to both type and quality) are sold by the taxpayer at the time of the contributions (or, if not so sold at such time, in the recent past).