Charitable contributions and deductions

Question 1

Charitable contributions must be made to what types of organizations to receive deductions

Answer 1

Qualified organization

Question 2

Qualifying organizations are also classified as the following

Answer 2

Public charities

Private foundations

Question 3

Are deductions allowed for volunteering services?

Answer 3

No, but related personal expenses are deductible

Question 4

What must an individual Keep records on shareable deductions?

Answer 4

Cancel check

Bank records

Receipt from the Donee organization

Question 5

Is an appraisal required for non-cash property over $500 and less than are equal to $5000

Answer 5

No

Question 6

Are you required to get an appraisal for property over $5000

Answer 6

Yes, and the cost of an appraisal is not deductible

Question 7

Generally, the value of donated property is valued at what?

Answer 7

FMV

Question 8

In general, what are the limits for deductions and charitable contributions?

Answer 8

50% of AGI limit for all charitable contributions during a year

Increase to 60% of AGI for cash contributions to 50% charities

Carryover up to five years is available for disallowed amounts

Question 9

Ordinary income property is sold gives rise to ordinary income. What is the deduction if it is donated to charity?

Answer 9

Deductions are the lesser of the fair market value or adjusted basis

Deductions are further limited to a maximum tax deduction of 60% of the taxpayers AGI if the charity is a public charity and 30% of the taxpayers AGI if the charity is private

Question 10

Gain property is property that is sold gives rise to long-term capital gain or section 1231 gain includes stocks, bonds and real estate. What is the deduction amount?

Answer 10

Deduction amount equals fair market value

Question 11

What contributions to charity are limited to the 30% of AGI

Answer 11

Cash and ordinary income property to private non-operating foundations that do not qualify as a 50% organization

Long-term capital gain property donated to 50% organizations

Question 12

Long-term capital gain property given to private non-operating foundations has a ceiling of what percent If not given to a 50% organization

Answer 12

20%

Question 13

This is the charitable contributions deductions chart

Answer 13

Question 14

What is a bargain sale to charity?

Answer 14

Occurs when a donor or seller transfers property to a charity in exchange for a sum that is less than the fair market value of property

Considered part sale part charitable contribution allocated on a pro rata basis

Question 15

What are the income tax ramifications of a bargain sale to charity?

Answer 15

Difference between the sales price of the asset and the sellers basis allocated to the asset will be capital gain to the seller for income tax purposes

Difference between the fair market value of the asset and the consideration received is consider the allowable amount of charitable contribution. The basis that is not allocated to the sale of the asset is the basis for the consideration of the charitable contribution.

Question 16

How do you figure the basis allocation of a bargain sale to charity?

Answer 16

Basis of the property sold in a bargain sale to charity must be allocated between the portion of the property sold, and the portion donated to charity

Formula to calculate the basis on the property sold is as follows

Amount realized on sale to charity / fair market value of entire property

Question 17

What is a gift of remainder interest to charity?

Answer 17

Lifetime transfer to charity is a gift of a partial interest with the charities interest in the transfer of property as a remainder interest.

Question 18

Example of a bargain sale to charity

Answer 18