Income Tax Chapter 3: Charitable Contributions and Deductions

Question 1

If appreciated property sold would create ordinary income and you donate it to a charity, how would it be treated?

Answer 1

Deduction is limited to basis

Question 2

What is the maximum allowable deduction for cash gifts to 50%O/30%Os?

Answer 2

60% of AGI

Question 3

For art objects: can FMV be used to valuate the donation if the charity can use the art object in its charitable activity?

Answer 3

Yes

Question 4

If art is use-UNrelated property to a charity, what should you value it at?

Answer 4

Basis; if it’s use-related, you can value it at FMV

Question 5

What is the charitable deduction limitation for gifts of STCG?

Answer 5

Limited to the donated property’s basis and 50% of AGI

Question 6

For property lost (like stock), what is charitable deduction limited to?

Answer 6

Its current FMV; The client should take the LTCL, and then donate the proceeds

Question 7

How much does the Mormon church require members to tithe and how much can they, as a business entity, deduct of their taxable income for charitable gifts?

Answer 7

10%

Question 8

How are charitable contributions made through a sole proprietorship seen by the IRS?

Answer 8

As made by the person, not the business; time is not deductible

Question 9

What happens when the donor dies with more deductions carried forward?

Answer 9

At death, the deduction stops for income tax purposes.

Question 10

Is donated property removed from an estate?

Answer 10

Yes

Question 11

In order to be eligible for charitable deductions, you must _______.

Answer 11

Itemize; easier to do when you have real estate taxes and mortgage interest.

Question 12

LTCG property
If you use basis, you can deduct up to ___ of AGI
If you use FMV, you can deduct up to ___ of AGI

Answer 12

50%, 30%

Question 13

What form do corporations file under?

Answer 13

1120