Question

#28) An individual donates artwork to San Francisco General Hospital. This was the only charitable contribution the taxpayer makes during the year. The artwork was purchased several years ago for $50,000; it is worth $140,000 at the time of the donation. The taxpayer's AGI is $160,000. Which of the following could be an accurate statement regarding the taxpayer's charitable deduction for the artwork?

Group of answer choices

a-The taxpayer deducts $48,000 in the current year and carries over $2,000 to the next year.

b-The taxpayer deducts $48,000 in the current year and carries over $92,000 to the next year.

c-The taxpayer deducts $50,000 in the current year and carries over $0 to the next year.

d-None of the above statements could be accurate with respect to the taxpayer's charitable contribution deduction.

Please show your calculations. Thanks.

Answer 1

As per the given data O De artwort Original Price = $50,000 The market value Clair] = $i; u oooo Here 950,000 is considered because accor- ding to the assesing deduction to charitable donation the original Price is taken into account insted of market price now, the taxpayer can deduct upto 50% of AG as contribution AGD & $ 1,60,000 [data] 160000 @ 50% - 80000 , so the taxpayer can deduct donation of upto $80000 from his AG current year. If the charitable amount was higher than & 80000 then it would have carried forward . to next year ang him As the value of donation is $50000, he will deduct that amount wrrent year and do is carried over next year Thus the curred option is (c) 19