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28 December, 18:32

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. 28 December, 20:51
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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
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