Joeseph Thompson is president and sole shareholder of Jay Corporation. In Decemb

Question

Joeseph Thompson is president and sole shareholder of Jay Corporation. In December 2010, Joe asks your advice regarding a charitable contribution he plans
to have the corporation make to the University of Maine, a qualifed public charity. Joe is considering the following alternatives as charitable contribution
in December 2010:

Fair Market
1 Cash donation 120000
2 Unimproved land held for six years(20000 basis) 120000
3 Maize Corporation stock held for eight months (20000 basis) 120000
4 Brown Corporation stock held for two years (170000 basis) 120000




Joe has asked you to help him decide which of these potential contributions will be most advantageous taxwise. Jay's taxable income $3.5 million before considering the contribution. Rank the four alternatives

Explanation / Answer

1.most advantageous route would be to sell your Brown Corporation stock and donate the funds to the University of Maine.

2.If you donate the funds received from the selling of Brown Corporations stock, give a cash donation of $120,000,

3.donate the unimproved land held for six years, you would be able to show a $120,000 charitable contribution.

4.If you donate the Maize Corporation stock, you would be able to show a $20,000 charitable contribution. If you contribute the Brown Corporation stock, you would show a lower charitable contribution. Although, if you contribute the Brown Corporation stock and donate $120,000 to the University of Maine.

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