Give And Take Donating to certain causes may allow you to deduct more than you contribute.

It's the holiday season, and once again it seems as if everyone's got their hands out. Just think of those legions of Santas ringing their bells and collecting cash in big red pots. Then think of the IRS' rather tiresome decree that a canceled check isn't good enough as a receipt for a charitable donation. It's enough to make even the most generous turn into Scrooge.

While individual tax rules seem uncharitable, the rules for corporations are another story. Give away inventory, and the IRS will actually encourage those charitable thoughts of yours.

How can this be? Well, according to Martin Greif, a tax partner with the accounting and consulting firm Goldstein, Golub, Kessler and Co. in New York City, there is a special provision in the tax code that allows corporations to take a deduction for more than their cost basis if the items are donated to charity. So instead of letting your excess inventory depreciate until it's worth nothing to you or anybody else, you can make a donation to a worthy charity and improve your cash flow at the same time.