Question

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 Hobbs Medical Center IBM stock State Museum Antique painting A needy family Food and clothes United Way Cash Cost FMV $ 7,400 $46,000 6,200 3,720 640 380 32,000 32,000 Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.)

Answer 1

Requirement a: AGI is $ 220,000 Charitable contributions are 50% deductible subject to 50% AGI Particulars Amount Amount 50% AGI limit $ 110,000 50% contribution-cash $ 16,000 50% contribution-painting $ 1,860 Total 50% contribtions $ 17,860 Maximum remaining contributions to reach 50% $ 92,140 The IBM stock is capital gain property, therefore calvin can deduct the FMV of stock ($46,000) subject to Lesser of following 1. value of stock upto 30% of AGI i.e., 66,000 2. the remaining amount of deduction to reach the 50 percent limit i.e., $92,140 Hence calvin can deduct $46,000 value of stock in the current year itself Contribution made to needy family is not eligiblefor deduction as it is not a qualified charity. The painting is not a capital gain property because it is not appreciated in value over the years $ 63,860 Therefore Charitable contribution deduction [ 17,860 +46,000 ] Carryover

Requirement b: It doesn't make any difference to the answer part a because the paintingis not an capital gain property $ 63,860 Therefore Charitable contribution deduction ( 17,860 +46,000 ] Carryover

Requirement c:AGI is $109,000 109,000 x 50% Particulars Amount Amount 50% AGI limit $ 54,500 50% contribution-cash $ 16,000 50% contribution-painting $ 1,860 Total 50% contributions $ 17,860 Maximum remaining contributions to $ 36,640 The IBM stock is capital gain property, therefore calvin can deduct the FMV of stock ($46,000) subject to Lesser of following 1. value of stock upto 30% of AGI i.e.,$ 32,700 2. The remaining amount of deduction to reach the 50 percent limit i.e., $36,640 Hence calvin can deduct only $32,700 value of stock in the current year, the remainig value of stock [ 46,000 -32,700 ] $13,300 will be carried forward to next year subject to 30% AGI limit. $ 50,560 Therefore Charitable contribution deduction [ 17,860 + 32,700 ] Carryover $13,300

Requirement d: Charitable contributions are 50% deductible subject to 50% AGI Particulars Amount Amount 50% AGI limit $ 110,000 50% contribution-cash $ 16,000 50% contribution-painting $ 1,860 Total 50% contribtions $ 17,860 Maximum remaining contributions to $ 92,140 The IBM stock is capital gain property, but because the donee is private nonoperating foundation the deduction is subject to Lesser of following 1. value of stock upto 20% of AGI i.e., 44,000 2. the remaining amount of deduction to reach the 50 percent limit i.e., $92,140 Hence calvin can deduct only $ 44,000value of stock in the current year, the remainig value of stock ( 46,000 -44,000 $2,000 will be carried forward to next year subject to 20% AGI limit. $ 61,860 Therefore Charitable contribution deduction (17,860 +44,000 ] Carryover $2,000