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Check my work In year 1 (the current year), LAA Inc. made a charitable donation of $121,500 to the American Red Cross (a qual

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Answer #1

Charitable contribution deduction for Year 1

$77000

Maximum charitable contribution deduction = 10% of taxable income before charitable contribution and dividends received deduction. However, NOL carryovers are deducted from taxable income to determine charitable contribution deduction.

LAA's modified taxable income = 581000+121500+67500 = $770000

LAA's charitable contribution deduction =770000*10% = $77000

The remaining $44500 (121500-77000) is carried over for up to five years.

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