Allison is the sole shareholder of Destiny Corporation, which operates a travel

Question

Allison is the sole shareholder of Destiny Corporation, which operates a travel agency for business travelers. Allison would like the corporation to donate some used computers to a local private school dedicated to the education of young ladies. The private school is a tax-exempt organization that qualifies donors for the charitable deduction. The corporation purchased the computers two years ago for a total cost of $90,000, and for tax purposes expensed this entire amount in the year of the purchase under the first-year expensing rule of Section 179 of the Internal Revenue Code. Currently the fair market value of the computers is $40,000. Allison has asked you to determine what the corporation's tax deduction will be for this donation. The corporation's taxable income is sufficient for it deduct up to $50,000 in charitable contributions. Using internet sources, find the answer to her question

Explanation / Answer

Allison can deduct the fair market of the computers on the date of the donation. The fair market value of the computers is $40,000 therefore that is what Allison can deduct.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

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