Question

.43. LO.1 Aquamarine Corporation, a calendar year C corporation, makes the following donations to qualified charitable organizations during the current year: Adjusted Basis Fair Market Value Painting held four years as an investment, to a $15,000 $25,000 church, which sold it immediately Apple stock held two years as an investment, to 40,000 90,000 United Way, which sold it immediately Canned groceries held one month as inventory, to 10,000 17,000 Catholic Meals for the Poor Determine the amount of Aquamarine Corporation's charitable deduction for the current year. (Ignore the taxable income limitation.)

Answer 1

The amount of Aquamarine Corporation's charitable deduction is calculated as follows:
Painting: The amount of the contribution is limited to = basis

Stock: The amount of the contribution is = fair market value

Groceries: The amount of the contribution is =
basis plus 50% of the appreciation on the property.

Therefore, the total charitable deduction = $118,500 = $15,000 + $90,000 + $10,000 + 0.5(17,000-10,000)

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