It takes a little math, but let us explain.
The donating business can deduct the lesser of (a) twice the basis value of the donated food or (b) the basis value of the donated food plus one-half of the food’s expected profit margin (if the food were sold at its fair market value). Under the enhanced deduction, all businesses may deduct up to 15% of their taxable income for food donations.
To put it simply, let’s say you donate a crate of potatoes at a market value of $100, and a basis value of $30. The profit margin would be $70. So twice the basis value is $60 as compared to $65, which is basis value plus half the profit margin. That means, you can deduct $60 off your taxes for that donation!