Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.) d. Calvin’s AGI is $200,000 and Hobbs is a nonoperating private foundation. e. Calvin’s AGI is $200,000 but the painting is worth $70,000.
Calvin reviewed his cancelled checks and receipts this year for charitable contributions, which included an antique painting and IBM stock. He has owned the IBM stock and the painting since 2005.
| Donee | Item | Cost | FMV | ||
| Hobbs Medical Center | IBM stock | $ | 7,000 | $ | 42,000 |
| State Museum | Antique painting | 6,000 | 3,600 | ||
| A needy family | Food and clothes | 600 | 360 | ||
| United Way | Cash | 28,000 | 28,000 | ||
|
|
Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.)
d. Calvin’s AGI is $200,000 and Hobbs is a nonoperating private foundation.
e. Calvin’s AGI is $200,000 but the painting is worth $70,000.
The IBM stock is capital gain property but because the done is a private nonoperating foundation, the deduction for the value of the stock is subject to a 20 percent of AGI limitation. Hence, Calvin can deduct the lesser of
(1) the value of the stock up to the 20 percent AGI limit ($40,000) or
(2) the remaining amount of deduction to reach the 50 percent limit. i.e.
50 percent of AGI Limit = $200000*50% = $100000
Contributions-cash = $28000
Contributions-painting = $3600
TOTAL Contributions = $31600
Maximum contribution to reach 50 percent = $100000 - $31600 = $68400
Hence, Calvin can deduct $40,000 this year consisting of cash of $28,000, painting of $3,600, and the stock of $8,400. The remaining value of the stock $33,600 ($42,000 − $8,400) is carried over to next year subject to the 20 percent of AGI limit.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
