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Calvin’s AGI is $84,000. charitable contribution deduction 42000 carryover  ?

Calvin’s AGI is $84,000. charitable contribution deduction 42000 carryover  ?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Calvin’s AGI is $84,000.

charitable contribution deduction 42000

carryover  ?

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 6,400 36,000 State Museum Antique painting 5,700 3,420 A needy family Food and clothes 540 320 United Way Cash 22,000 22,000 Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.) a. Calvin's AGI is $170,000. b. Calvin's AGI is $170,000 but the State Museum told Calvin that it plans to sell the painting. c. Calvin's AGI is $84,000. d. Calvin's AGI is $170,000 and Hobbs is a nonoperating private foundation. e. Calvin's AGI is $170,000 but the painting is worth $52,000. Expert Answer O Anonymous answered this Was this answer helpful? 1 1 7,812 answers Part A Calvin's deduction = cash of S22,000 + painting of $3,420 + stock of $36,000 = $61420 Donation to the needy family will not qualify for a charitable deduction. IBM stock being a capital gain property, the FMV of the stock can be deducted subject to a 30% of AGI ceiling. The painting not being a capital gain property, the value of the painting can be deducted subject to the 50% of AGI ceiling. However, the total donation is subject to the 50% of AGI ceiling. Part B Calvin's deduction = cash of S$22,000 + painting of $3,420 + stock of $36,000 = $61420 Donation to the needy family will not qualify for a charitable deduction. IBM stock being a capital gain property, the FMV of the stock can be deducted subject to a 30% of AGI ceiling. The painting not being a capital gain property, the value of the painting can be deducted subject to the 50% of AGI ceiling. However, the total donation is subject to the 50% of AGI ceiling. Part C Calvin's deduction = cash of S22,000 + painting of $3,420 + stock of $16580 = $42000 IBM stock being a long-term capital gain property, the FMV of the stock can be deducted subject to the lesser of (1) the value of the stock up to the 30 percent AGI limit or (2) the remaining amount of deduction to reach the 50 percent limit 50 percent AGI limit 42000 50 percent Contributions – cash 22000 50 percent Contributions – painting 3420 25420 Total 50 percent contributions 16580
Transcribed Image Text: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 6,400 36,000 State Museum Antique painting 5,700 3,420 A needy family Food and clothes 540 320 United Way Cash 22,000 22,000 Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.) a. Calvin's AGI is $170,000. b. Calvin's AGI is $170,000 but the State Museum told Calvin that it plans to sell the painting. c. Calvin's AGI is $84,000. d. Calvin's AGI is $170,000 and Hobbs is a nonoperating private foundation. e. Calvin's AGI is $170,000 but the painting is worth $52,000. Expert Answer O Anonymous answered this Was this answer helpful? 1 1 7,812 answers Part A Calvin's deduction = cash of S22,000 + painting of $3,420 + stock of $36,000 = $61420 Donation to the needy family will not qualify for a charitable deduction. IBM stock being a capital gain property, the FMV of the stock can be deducted subject to a 30% of AGI ceiling. The painting not being a capital gain property, the value of the painting can be deducted subject to the 50% of AGI ceiling. However, the total donation is subject to the 50% of AGI ceiling. Part B Calvin's deduction = cash of S$22,000 + painting of $3,420 + stock of $36,000 = $61420 Donation to the needy family will not qualify for a charitable deduction. IBM stock being a capital gain property, the FMV of the stock can be deducted subject to a 30% of AGI ceiling. The painting not being a capital gain property, the value of the painting can be deducted subject to the 50% of AGI ceiling. However, the total donation is subject to the 50% of AGI ceiling. Part C Calvin's deduction = cash of S22,000 + painting of $3,420 + stock of $16580 = $42000 IBM stock being a long-term capital gain property, the FMV of the stock can be deducted subject to the lesser of (1) the value of the stock up to the 30 percent AGI limit or (2) the remaining amount of deduction to reach the 50 percent limit 50 percent AGI limit 42000 50 percent Contributions – cash 22000 50 percent Contributions – painting 3420 25420 Total 50 percent contributions 16580
Required information [The following information applies to the questions displayed below.] 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 $ 6,400 $36,000 5,700 3,420 Hobbs Medical Center IBM stock Antique painting Food and clothes State Museum A needy family United Way Cash 22,000 22,000 Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.) c. Calvin's AGI is $84,000. X Answer is complete but not entirely correct. Charitable contribution deduction $ 42,000 Carryover 3,000 X %24
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] 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 $ 6,400 $36,000 5,700 3,420 Hobbs Medical Center IBM stock Antique painting Food and clothes State Museum A needy family United Way Cash 22,000 22,000 Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.) c. Calvin's AGI is $84,000. X Answer is complete but not entirely correct. Charitable contribution deduction $ 42,000 Carryover 3,000 X %24
Expert Solution
Step 1

The taxpayer is allowed to make charitable contributions made to the qualified organizations if the taxpayer itemized their deductions. Usually, the taxpayer is allowed to deduct up to 50% of AGI.

Hence, charitable contribution deduction=$42,000

Charitable contribution deduction=AGI×Deduction limit=$84,000×50%=$42,000

 

 

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