Ramon had AGI of $180,000 in 2015. He is considering making a charitable contrib
ID: 2496724 • Letter: R
Question
Ramon had AGI of $180,000 in 2015. He is considering making a charitable contribution this year to the American Heart Association, a qualified charitable organization. Determine the current allowable charitable contribution deduction in each of the following independent situations, and indicate the treatment for any amount that is not deductible currently.
a. A cash gift of $95,000.
The cash gift of $______ is fully deductible as a charitable contribution. However, in the current year, Ramon’s deduction is limited to $______. The remaining $_______ can be carried forward for five years.
b. A gift of OakCo stock worth $95,000 on the contribution date. Ramon had acquired the stock as an investment two years ago at a cost of $84,000.
Ramon’s value for the contribution is $________, the fair market value of the stock. The deduction for 2015 is limited to ______ . The remaining $______ can be carried forward for five years.
c. A gift of a painting worth $95,000 that Ramon purchased three years ago for $60,000. The charity has indicated that it would sell the painting to generate cash to fund medical research.
The contribution is valued at $______. The amount is fully deductible in the current year because the gift is (above/below) the applicable _____%of AGI limitation.
Explanation / Answer
a. A cash gift of $95,000.
The cash gift of $95,000 is fully deductible as a charitable contribution. However, in the current year, Ramon’s deduction is limited to $90,000 i.e. (50% of $180,000). The remaining $5,000 can be carried forward for five years.
b. A gift of OakCo stock worth $95,000 on the contribution date. Ramon had acquired the stock as an investment two years ago at a cost of $84,000.
Ramon’s value for the contribution is $95,000, the fair market value of the stock. The deduction for 2015 is limited to $54,000 i.e. (30% of $180,000) . The remaining $41,000 can be carried forward for five years.
c. A gift of a painting worth $95,000 that Ramon purchased three years ago for $60,000. The charity has indicated that it would sell the painting to generate cash to fund medical research.
The contribution is valued at $60,000. The amount is fully deductible in the current year because the gift is below the applicable 50%of AGI limitation.
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