Eleanor has adjusted gross income of $50,000 from her job as a librarian. Each y

Question

Eleanor has adjusted gross income of $50,000 from her job as a librarian. Each year, she donates $25,000 to the athletic program at State College, from monies she inherited years ago upon the death of her parents, and in exchange, she receives athletic event seating rights. She always claims a charitable contribution deduction as part of her itemized deductions. She has heard that the limitations on gifts to charities increases by 10% as part of the Tax Cuts and Jobs Act, and tells you she will increase her donation accordingly for 2018. Based on your knowledge of TCJA, how much of this contribution will be deductible on her 2018 tax return? The entire contribution will be deductible in full on Schedule A.   The entire contribution will be deductible, but it will be limited to 2% of her adjusted gross income.   60% of the contribution will be deductible on Schedule A.   This will not be deductible. Effective for 2018 through 2025, contributions in exchange for seating rights will no longer be deductible Eleanor has adjusted gross income of $50,000 from her job as a librarian. Each year, she donates $25,000 to the athletic program at State College, from monies she inherited years ago upon the death of her parents, and in exchange, she receives athletic event seating rights. She always claims a charitable contribution deduction as part of her itemized deductions. She has heard that the limitations on gifts to charities increases by 10% as part of the Tax Cuts and Jobs Act, and tells you she will increase her donation accordingly for 2018. Based on your knowledge of TCJA, how much of this contribution will be deductible on her 2018 tax return?

Explanation / Answer

Answer is option C 60% of the contribution will be deductible on Schedule A.  

The TCJA has introduced several changes to itemized deductions for tax years 2018-2025. Schedule A is used along with Form 1040 to report itemized deductions. qualified charitable contributions is one of the itemized deduction. Beginning in 2018, it is possible to claim a deduction for qualified charitable contributions, up to 60% of AGI.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.