On October 3, the IRS issued Notice 2008-90, stating that until further guidance is issued, taxpayers can compute the deductible amount and the adjustment to cost of goods sold for contributions of inventory property under either Section 170(e)(3) or Section 170(e)(1). The IRS will not challenge a taxpayer’s computation and adjustments under either code section or their corresponding Treasury regulations. The regulators are studying the computations involving contributions of inventory property, as defined in Section 170(e)(3)(A) of the code. The IRS said it was aware that some taxpayers making qualified contributions may, because of the income limitation of Section 170(b)(2), prefer to apply the provisions of Section 170 (e)(1) and Section 1.170A-1(c) of the regulations rather than the provisions of Section 170(e)(3) and Reg. Section 1.170A-4A (c). Section 170(e)(1) may be preferable to some corporations because there are different accounting rules for inventory property that apply if a contribution is made under 170(e)(3). In general, if a corporation makes a contribution under Section 170(e)(3), the corporation must reduce its cost of goods sold (COGS), usually by the basis or cost in the property. Some reduction in COGS is necessary to prevent double deductions. The IRS and Treasury are looking for comments on the computations and any other issues related to contributions of inventory by Jan. 26.