Question

Required information (The following information applies to the questions displayed below.) Calvin reviewed his canceled checks and receipts in 2020 for charitable contributions, which included an antique painting and IBM stock. He has owned the IBM stock and the painting since 2005. Donee Item Cost FRV Hobbs Medical Center IBM stock $ 5,400 $26,000 State Museum Antique painting 5,200 3,120 A needy fanily Food and clothes 260 United Way Cash 12,000 12,000 440 Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.) d. Calvin's AGI is $120,000 and Hobbs is a private nonoperating foundation Charitable contribution deduction Carryover

Answer 1

Charitable contribution deduction $39,120

Carryover $2000

Calculation:

The IBM stock is capital gain property but because the Donee is a private non-operating foundation, the deduction for the value of the stock is subject to a 20% of AGI limitation.

Hence, Calvin can deduct the lesser of

(1) The value of the stock up to the 20% AGI limit $24000 (120,000 * 20%) or

(2) The remaining amount of deduction to reach the 50% limit ($60,000 - $3,120 - $12,000 = $44,880)

Hence, Calvin can deduct $39,120 this year consisting of cash of $12,000, painting of $3,120, and the stock of $24,000 (limited to 24,000).

The remaining value of the stock $2000 ($26,000 - $24,000) is carried over to next year subject to the 20% of AGI limit.