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Food Inventory: Charitable Deductions (2025 IRS Guide)

This guide covers “Food Inventory” within charitable deductions. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 526 (2025), Charitable Contributions, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

If you contribute property with an FMV that is more than your basis in it, you may have to reduce the FMV by the amount of appreciation (increase in value) when you figure your deduction.

Your basis in property is generally what you paid for it. If you need more information about basis, see Pub. 551.

Different rules apply to figuring your deduction, depending on whether the property is:

  • Ordinary income property, or

  • Capital gain property.

Food Inventory

Special rules apply to certain donations of food inventory to a qualified organization. These rules apply if all the following conditions are met.

  1. You made a contribution of apparently wholesome food from your trade or business. Generally, apparently wholesome food is food intended for human consumption that meets all quality and labeling standards imposed by federal, state, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions.

  2. The food is to be used only for the care of the ill, the needy, or infants.

  3. The use of the food is related to the organization’s exempt purpose or function.

  4. The organization doesn’t transfer the food for money, other property, or services.

  5. You receive a written statement from the organization stating it will comply with requirements (2), (3), and (4).

  6. The organization isn’t a private nonoperating foundation.

  7. The food satisfies any applicable requirements of the Federal Food, Drug, and Cosmetic Act and regulations on the date of transfer and for the previous 180 days.

If all the conditions just described are met, use the following worksheet to figure your deduction.

Worksheet 1.
Donations of Food Inventory
See separate Worksheet instructions.
(Keep for your records.)
1. Enter FMV of the
donated food		 _____
2. Enter basis of the donated
food		 _____
3. Subtract line 2 from line 1.
If the result is zero or less, stop here. Don’t complete the rest of this worksheet. Your charitable contribution deduction for food is the amount on line 1		 _____
4. Enter one-half of line 3 _____
5. Subtract line 4 from line 1 _____
6. Multiply line 2 by 2.0 _____
7. Subtract line 6 from line 5. If the result is less than zero, enter -0- _____
8. Add lines 4 and 7 _____
9. Compare line 3 and line 8. Enter the smaller amount _____
10. Subtract line 9 from line 1 _____
11. Enter 15% of your total net
income for the year from
all trades or businesses
from which food
inventory was donated		 _____
12. Compare line 10 and line 11.
Enter the smaller amount.
This is your charitable
contribution deduction
for the food		 _____

Worksheet instructions.

When determining the FMV to enter on line 1 of the worksheet, take into account the price at which the same or substantially the same food items (as to both type and quality) were sold by you at the time of the contribution. Don’t reduce this amount because the food wasn’t or couldn’t be sold by reason of your internal standards, lack of market, or similar circumstances. Also, don’t reduce this amount even though you produced the food exclusively for the purpose of transferring the food to a qualified organization.

If you don’t account for inventories under section 471 and you aren’t required to capitalize indirect costs under section 263A, you may elect, solely for the purpose of line 2 of the worksheet, to treat the basis of any apparently wholesome food as being equal to 25% of the FMV of such food.

Enter on line 11 of the worksheet 15% of your net income for the year from all sole proprietorships, S corporations, or partnerships (or other entity that isn’t a C corporation) from which contributions of food inventory were made. Figure net income before any deduction for a charitable contribution of food inventory.

If you made more than one contribution of food inventory, complete a separate worksheet for each contribution. Complete lines 11 and 12 on only one worksheet. On that worksheet, complete line 11. Then compare line 11 and the total of the line 10 amounts on all worksheets and enter the smaller of those amounts on line 12.

If line 11 is smaller than line 10, you can carry over the excess as a qualifying food inventory contribution to the following year. You may be able to include the excess in your charitable contribution deduction for the food in each of the next 5 years in order of time until it is used up, but not beyond that time.

More information.

See Inventory, earlier, for information about determining the basis of donated inventory and the effect on cost of goods sold. For additional details, see section 170(e)(3) of the Internal Revenue Code.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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