To be able to claim the deduction you first have to insure that the company you donate to is approved by the IRS. That company should be willing to furnish you with a copy of the IRS finding that qualifies them. You can also check IRS Pub 78, and IRS Pub 526.

If the donation is in excess of $250.00 you must have received a statement from the organization showing receipt of the donation. Some types of donations to some types of non-profits have exceptions so do your homework first.

The amount of your donation cannot be in excess of the of the cost you would have incurred if you had sold the item. So basically that means the donation is at cost. Another way to say it is that the amount of your deduction is the fair market value minus any gain you would have realized if you had sold it.

Inventory cannot be both a COGS expense and a contribution expense, one or the other.

The general rule is that if you bought it in the year you are donating it, then it is COGS. Other wise it is contribution expense.

So to get that done in QB.

Inventory bought this year and donated:

1. create a sales receipt, list the items
2. set the sales price to zero
3. enter in the memo block who you donated it to

Note the below procedure could also be used if inventory is bought this year but use the COGS account as the adjusting account.

Inventory bought before the year you donated:

1. bring up inventory adjust
2. set the adjusting account to the charitable donations expense account
3. lower the quantities of the item donated
4. enter in the memo block who you donated it to

ref: IRS Pub 526, Contributions of Property>Contributions Subject to Special Rules>Inventory