Required information [The following information applies to the questions displayed below.] In 2021, OCC Corporation made a charitable donation of $400,000 to the American Red Cross. For the year, OCC reported taxable income of $1,500,000 before deducting any charitable contributions, before deducting its $20,000 dividends-received deduction, and before deducting its $40,000 NOL carryover from last year. Assume the donation is a qualified contribution. a. What amount of the $400,000 donation is OCC allowed to deduct for tax purposes in 2021, what is the carryover to 2022, and when does the carryover expire? & Answer is complete but not entirely correct. < Prev 17 18 of 34 Next >

Required information [The following information applies to the questions displayed below.] In 2021, OCC Corporation made a charitable donation of $400,000 to the American Red Cross. For the year, OCC reported taxable income of $1,500,000 before deducting any charitable contributions, before deducting its $20,000 dividends-received deduction, and before deducting its $40,000 NOL carryover from last year. Assume the donation is a qualified contribution. a. What amount of the $400,000 donation is OCC allowed to deduct for tax purposes in 2021, what is the carryover to 2022, and when does the carryover expire? & Answer is complete but not entirely correct. < Prev 17 18 of 34 Next >

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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The Stoudemire Trust reports $45,200 of net investment income (NII) and $60,000 in net profits from an active business operation for 2020. Stoudemire retains all of the business profits but, under the terms of the trust agreement, distributes $17,400 cash from the NII to its sole beneficiary Marshall. Round your final answer to the nearest dollar. The trust's liability under the additional tax on NII is ${fill in the blank 1}
At the beginning of the year, the Baker Fund,a nongovernmental not-for-profit corporation,received a $125,000 contribution restrictedto youth activity programs. During the year,youth activities generated revenues of$89,000 and had program expenses of$95,000. What amount should Baker reportas net assets released from restrictions forthe current year?
Which of the following are characteristics of a gift tax charitable deduction? It is only for the amount of the charitable gift in excess of the annual exclusion amount. It allows up to 50% of the value of the gifted property to go to charity free of gift tax. The donee charity assumes any gift tax liability. It is available only for gifts to a qualified charity. A) II and III B) I and IV C) III and IV D) I and II
Snow Inc., a calendar year, accrual basis corporation, wants to make a $20,000 donation to the Wild Bird Sanctuary, a qualified charitable organization, but does not have adequate funds to make the contribution in 2023. On December 28, 2023, Snow's board of directors authorizes a $20,000 contribution to the Wild Bird Sanctuary. The donation is made on April 10, 2024. Based on these facts: a. Snow's 2023 income is reduced by $10,000 and Snow's 2024 income is reduced by $10,000. b. Snow gets no tax benefit in either 2023 or 2024 for the charitable contribution. c. Snow must pay $4,200 in Federal income taxes in 2023. d. Snow must deduct the $20,000 contribution in 2024, the year of the payment. e. Snow defers payment of $4,200 in Federal income taxes in 2023.
The following selected transactions occurred for a nongovernmental, not-for-profit organization. 1. Received a contribution of stock to establish an endowment fund. The income from the endowment is unrestricted. The donor had acquired the stock for $23 about 20 years earlier. Its estimated fair value when donated was $250. 2. Pledges receivable at year end were $100, all from pledges received during the year. The pledges are unrestricted and 5% of the pledges are estimated to be uncollectible. The pledges expect to be collected early next year. For questions 3-5, assume that the organization has adopted a policy that restrictions on donations made for capital purposes are met when the capital item is purchased. A cash gift of $200 was received restricted for the purchase of equipment. Equipment of $80 was purchased from the gift restricted for this purpose. Depreciation expense for the year on the equipment purchased is $10. Required: Prepare the journal entries for the above…
Early in 2018, a not-forprofit organization received a $4,000,000 gift from a wealthy benefactor. This benefactor specified that the gift be invested in perpetuity with income restricted to provide speaker fees for a lecture series named for the benefactor. The not-for-profit is permitted to choose suitable investments and is responsible for all other costs associated with initiating and administering this series.Neither the donor’s stipulation nor the law addresses gains and losses on this permanent endowment. In 2018, the investments purchased with the gift earned $100,000 in dividend income. The fair value of the investments increased by $300,000. The not-for-profit’s accounting policy is to record increases in net assets, for which a donor-imposed restriction is met in the same accounting period as gains and investment income are recognized, as increases in unrestricted net assets.Five presentations in the lecture series were held in 2018. The speaker fees for the five…
The Watson Foundation, a private not-for-profit entity, starts 2020 with cash of $100,000, contributions receivable (net) of $200,000, investments of $300,000, and land, buildings, and equipment (net) of $200,000. Net assets without donor restrictions were reported as $400,000, the same figure as the net assets with donor restrictions. Of the restricted net assets, $300,000 was purpose restricted whereas the other $100,000 had to be held permanently, although the subsequently earned income is without restriction. Fifty percent of the purpose restricted net assets had to be used to help pay for a new building. The remainder was restricted to the payment of officer salaries. Donors made no stipulations about the eventual reporting of buildings and other long-lived assets when acquired. Watson has one program service (health care) and two supporting services (fundraising and administrative). During the current year, Watson Foundation has the following transactions. Computed interest of…