The value of the yarn is deductible if you make the product. If you sell the product to someone they can deduct the full value if they donate it while you pay income taxes on the profit. Trying to backdoor your labor as a deduction is what the IRS has a problem with because you’re not allowed to do that.
Would the IRS have a problem with writing of the value of the yarn or the “market value” of the product?
The value of the yarn is deductible if you make the product. If you sell the product to someone they can deduct the full value if they donate it while you pay income taxes on the profit. Trying to backdoor your labor as a deduction is what the IRS has a problem with because you’re not allowed to do that.
Got it, thanks!