eBook Calculato Problem 10-38 (LO. 6) Ramon had AGI of $180,000 in 2017. He is c

Question

eBook Calculato Problem 10-38 (LO. 6) Ramon had AGI of $180,000 in 2017. 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 t situations, and indicate the treatment for any amount that is not deductible currently. he following independent a. A cash gift of $95,000. In the current year, Ramon's deduction for the cash contribution is can be carried forward V for The remaining X years. Feedback Check My Work A charitable contribution is define donations, both money and property, that qualify for the deduction. d as a gift made to a qualified organization. The potential charitable contribution deduction is the total of all b. A gift of OakCo stock worth $95,000 on the contribu of $84,000 tion date. Ramon had acquired the stock as an investment two years ago at a cost The stock's value for determining the contribution is The deduction for 2017 is $ The remaining can be carried forward for years Previous

Explanation / Answer

a)In current year, Ramon’s deduction for the Cash Contribution is $90,000 (50% of $180,000 AGI). The remaining $5,000 ($95,000 $90,000) can be carried forward for five years . b) The stock value for determining the contribution is $95,000. The deduction for 2017 is $54000 (30% of $180,000 AGI) The remaining $41,000 ($95,000 $54,000) can be carried forward for five years. c)The contribution is valued at $60,000 ($95,000 current value - $35,000 long-term capital gain element) The amount Deductible in the current year is $60,000 The amount is fully deductible in the current year because the gift is below the applicable 50% of AGI limitation Total present value of tax savings from the tax deduction if made this year: $90,000 x 28% $25,200.00 Total present value of tax savings from the tax deduction if made next year: $95,000 x 33% x .9434 $29,576

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