40. On December 30, 2011, Roberta purchased four tickets to a charity ball spons

Question

40. On December 30, 2011, Roberta purchased four tickets to a charity ball sponsored by the city of San Diego for the benefit of underprivileged children. Each ticket cost $200 and had a fair market value of $35. On the same day as the purchase, Roberta gave the tickets to the minister of her Church for personal use by his family. At the time of the gift of the tickets, Roberta pledged $4000 to the building fund of her church. The pledge was satisfied by a check dated December 31, 2011, but not mailed until January 3, 2012.
a. Presuming Roberta is a cash basis and calendar year taxpayer, how much can she deduct as a charitable contribution for 2011?
b. Would the amount of the deduction be any different if Roberta is an accrual basis taxpayer? Expain.

Explanation / Answer

a) Charitable contribution = 4 x 35= 140 because what is taking into consideration is the fair market value of the 4 tickets. We don count the 4000 check because she is a cash basis and calendar year taxpayer, and the check will be cashed on 2012. Which means that it doesn't correspond to the 2011 return.

b) Yes. If she was an accrual basis taxpayer, what is taking in consideration for her deduction is when she did the payment, not when it is cashed. As the date on the check is still in 2011, it has to be claimed in the 2011 tax return. So now the Charitable contribution will be: 4 x 35 + 4,000 = 4,140

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