How should a plant nursery LLC deduct donation of live plants to a nonprofit

[Plant Man]

I would like to donate live plants to a local non-profit. These plants will be directly planted in community gardens and will not be sold, so I understand I can use fair-market valuation.

Is this entered in donations sections or is this a directly deductible business expense? I am the sole owner of the business. 

[Bsch4477]

If you have deducted the cost of the plants as a business expense you can’t also deduct it as a charitable donation. That would be double dipping. 

[Plant Man]

There are a few months of labor on top of the soil, pot, and seed that are clamed as expenses from the spring planting. I expense as I go.

So, there is a large difference between the market value that it is being used as, and the materials cost to create. This would not be considered a donation apart from expensed materials?

[Bsch4477]

You have already deducted the full value as a business expense. The added amount reflected in the usual sales price of the plants is not deductible. 

[Opus 17]

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@Plant Man wrote:

There are a few months of labor on top of the soil, pot, and seed that are clamed as expenses from the spring planting. I expense as I go.

So, there is a large difference between the market value that it is being used as, and the materials cost to create. This would not be considered a donation apart from expensed materials?

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You have nothing to deduct, unless you report a sale, then you can deduct the selling price (which would be a wash).  You already deducted the cost of inventory and supplies, so your cost basis is zero.  The cost of labor is never a deductible charitable expense, and you already deducted the labor as a business expense anyway.  Your tax "reduction" comes from the fact that you have deducted expenses, but have no offsetting revenue, so you have lower taxable income.

See the section on Inventory in publication 526.

https://www.irs.gov/pub/irs-pdf/p526.pdf

[Bsch4477]

No. The market value cannot be used. 

[Plant Man]

Thanks everyone!