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Charitable Contributions And Deductions - Answer Key

1. B

Long-term gain intangible property (stock shares), are deductible up to 30% of AGI in the year of the gift. $50,000 AGI x 30% = $15,000. The remaining $5,000 contribution can be carried forward to future tax years.

2.
D

Donations exceeding $5,000 require appraisals. The donation of a car exceeding $500 in value will require a written acknowledgement from the charity on IRS Form 1098-C (or an equivalent statement), but no appraisal is required.

3.
A

Payments to political campaign committees or political action committees are non-deductible contributions, and do not meet the criteria of qualified public charities.

4.
B

LT Capital Gain Property (unrelated use) deductible limit up to 50% of AGI at basis of the property. That's up to $15,000 ($30,000 x 50%) for Lefty for public charity donations. Since Lefty's cost basis of the card was $200, that's his maximum deduction.

5.
B

ABC Corp's maximum charitable deduction is limited to 10% of taxable income or $10,000 ($100,000 x 10%). Since the donation is inventory, ABC Corp will be allowed to deduct the basis of the property or $2,000.

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