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katadvisor123
New Member

How do we value the gift of a hand painted shoe to a athletic shoe manufacturer to demonstrate our design abilities?

We are a start up, that advertises hand painted wearables.  We purchase clothes, paint the designs and advertise for retail on the internet.   Our athletic shoe designs are listed at $1,200 on the internet.   Recently, created a unique design, applied it to a manufacturer's shoe and gave to the manufacturer to demonstrate our designs.

How should we value this?  Is it marketing? Is it  gift?

1 Best answer

Accepted Solutions
KrisD
Intuit Alumni

How do we value the gift of a hand painted shoe to a athletic shoe manufacturer to demonstrate our design abilities?

You can report it as marketing, but you can only deduct what it cost you, not the retail value of your finished product.

If it cost $10.00 in materials to make a product that sells for $200.00, that marketing product's deductible value is $10.00 for you.

If you personally supply the labor, you cannot add the labor in.

If you had employees work on it, you can add in their labor cost to it.

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1 Reply
KrisD
Intuit Alumni

How do we value the gift of a hand painted shoe to a athletic shoe manufacturer to demonstrate our design abilities?

You can report it as marketing, but you can only deduct what it cost you, not the retail value of your finished product.

If it cost $10.00 in materials to make a product that sells for $200.00, that marketing product's deductible value is $10.00 for you.

If you personally supply the labor, you cannot add the labor in.

If you had employees work on it, you can add in their labor cost to it.

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