3 April, 07:17

# Madeoff donated stock (capital gain property) to a public charity. He purchased the stock 3 years ago for \$100,000, and on the date of the gift, it had a fair market value of \$200,000. What is his maximum charitable contribution deduction for the year if his AGI is \$500,000 (before considering the itemized deduction phase-out) ? A. \$100,000B. \$200,000C. \$150,000D. \$250,000E. None of these

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1. 3 April, 09:02
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correct option is C. \$150,000

Explanation:

given data

purchased = \$100,000

fair market value = \$200,000

AGI = \$500,000

to find out

maximum charitable contribution deduction for the year

solution

we know that in charitable contribution that is deductible up to the 50% of modified adjust gross income

so when donations are in the form of assets that is appreciated

then deduction allow will be 30% of modified adjust gross income

hence charitable contribution = \$100,000 to \$200,000

and allowable deduction = 30% of \$500,000

allowable deduction = \$150,000

so that maximum charitable contribution deduction for the year is \$150,000

correct option is C. \$150,000