Problem 10-36 (Algorithmic) (LO. 6, 8) In December each year, Eleanor Young contributes 10% of her...

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Problem 10-36 (Algorithmic) (LO. 6, 8) In December each year, Eleanor Young contributes 10% of her gross income to the United December 5, 2019 Ms. Eleanor Young 2622 Bayshore Drive Berkeley, CA 94709 Dear Ms. Young: I have evaluated the proposed alter

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Answer 1

Answer #1

Gross income	454000	(45400/10*100)

Option 1- CASH DONATION
Adjusted Gross Total Income		454000
50% Of Above Allowable		227000

Cash Donation	45400
Allowable Donation		45400


Option 2 - Sale of Unimproved Land
Allowable Donation Restricted to 30% if Public Charity and 20% if Private Charity

Allowable Donation (30%)		136200
Maximum to donation made		45400

Allowable Donation		45400

Option 3 - Sale of Blue Corporation Stock
Short Term Gain
Allowble donation		6810


Option 4 - Sale of Gold Corporation Stock
Allowable Donation		45400


Sale of Stock
Sale Value/FMV		45400
Purchase Cost		54480
Long Term Capital Loss		-9080
For individuals, a net loss can be claimed as a tax deduction against ordinary income, up to $3,000 per year ($1,500 in the case of a married individual filing separately). Any remaining net loss can be carried over and applied against gains in future years. However, losses from the sale of personal property, including a residence, do not qualify for this treatment.

Amounts as per sequence of Red Marks in Letter

1. $6810 - Blue Corporation Stock - Allowable Donation

2.Capital Loss - $9080

3.Capital Gain of $9080 or more this year

4.$3000/$1500 - This year

5.And Carry Forward $6080 or $7580

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Answer 2

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