I 

108TH CONGRESS 

1ST SESSION H. R. 543

To amend the Internal Revenue Code of 1986 to provide special rules for 

determining the amount allowed as a deduction for a charitable contribution of apparently wholesome food which is inventory. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 5, 2003

Mr. BAKER introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to provide 

special rules for determining the amount allowed as a 

deduction for a charitable contribution of apparently 

wholesome food which is inventory.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. CHARITABLE DEDUCTION FOR CONTRIBU4 TIONS OF FOOD INVENTORIES. 

5 (a) IN GENERAL.—Subsection (e) of section 170 of 

6 the Internal Revenue Code of 1986 (relating to certain 

7 contributions of ordinary income and capital gain prop-
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1 erty) is amended by adding at the end the following new 

2 paragraph: 

3 ‘‘(7) APPLICATION OF PARAGRAPH (3) TO CER4 TAIN CONTRIBUTIONS OF FOOD INVENTORY.—For 

5 purposes of this section—

6 ‘‘(A) EXTENSION TO INDIVIDUALS.—In the 

7 case of a charitable contribution of apparently 

8 wholesome food—

9 ‘‘(i) paragraph (3)(A) shall be applied 

10 without regard to whether the contribution 

11 is made by a C corporation, and

12 ‘‘(ii) in the case of a taxpayer other 

13 than a C corporation, the aggregate 

14 amount of such contributions from any 

15 trade or business (or interest therein) of 

16 the taxpayer for any taxable year which 

17 may be taken into account under this sec18 tion shall not exceed 10 percent of the tax19 payer’s net income from any such trade or 

20 business, computed without regard to this 

21 section, for such taxable year. 

22 ‘‘(B) LIMITATION ON REDUCTION.—In the 

23 case of a charitable contribution of apparently 

24 wholesome food, notwithstanding paragraph 

25 (3)(B), the amount of the reduction determined 
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1 under paragraph (1)(A) shall not exceed the 

2 amount by which the fair market value of such 

3 property exceeds twice the basis of such prop4 erty. 

5 ‘‘(C) DETERMINATION OF BASIS.—If a 

6 taxpayer—

7 ‘‘(i) does not account for inventories 

8 under section 471, and 

9 ‘‘(ii) is not required to capitalize indi10 rect costs under section 263A, 

11 the taxpayer may elect, solely for purposes of 

12 paragraph (3)(B), to treat the basis of any ap13 parently wholesome food as being equal to 25 

14 percent of the fair market value of such food. 

15 ‘‘(D) DETERMINATION OF FAIR MARKET

16 VALUE.—In the case of a charitable contribu17 tion of apparently wholesome food which is a 

18 qualified contribution (within the meaning of 

19 paragraph (3), as modified by subparagraph 

20 (A) of this paragraph) and which, solely by rea21 son of internal standards of the taxpayer or 

22 lack of market, cannot or will not be sold, the 

23 fair market value of such contribution shall be 

24 determined—
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1 ‘‘(i) without regard to such internal 

2 standards or such lack of market, and 

3 ‘‘(ii) by taking into account the price 

4 at which the same or substantially the 

5 same food items (as to both type and qual6 ity) are sold by the taxpayer at the time of 

7 the contribution (or, if not so sold at such 

8 time, in the recent past). 

9 ‘‘(E) APPARENTLY WHOLESOME FOOD.—

10 For purposes of this paragraph, the term ‘ap11 parently wholesome food’ has the meaning given 

12 such term by section 22(b)(2) of the Bill Emer13 son Good Samaritan Food Donation Act (42 

14 U.S.C. 1791(b)(2)), as in effect on the date of 

15 the enactment of this paragraph.’’. 

16 (b) EFFECTIVE DATE.—The amendment made by 

17 this section shall apply to contributions made after the 

18 date of the enactment of this Act.

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