Charitable Contributions And Deductions - Sample Questions 1 - 5

1. You donate stock (held for two years) with a FMV of $20,000 to your church. Your AGI for the same year was $50,000. What is the amount of your allowable deduction in the year of the gift?

A) $20,000
B) $15,000
C) $10,000
D) $7,500

2.
All of the following statements are true EXCEPT:

A) Charitable contributions can be carried forward for up to five years.
B) Cash charitable contributions are deductible up to 50% of AGI.
C) Non-profit public hospitals are qualified public charities.
D) Donation of a $2,500 car will require a written appraisal.

3.
All of the following would be considered "qualified" public charities EXCEPT:

A) Republican Campaign Committee
B) Boy Scouts of America
C) Penn State University
D) United Way

4. Lefty bought a Hank Aaron baseball card in 1995 for $200. He donated the card to the Humane Society 15 years later when the card had a FMV of $800. Lefty has an AGI of $30,000 and he plans on itemizing his deductions. What is his charitable deduction if the Humane Society can sell the card for $800?

A) $100
B) $200
C) $400
D) $800


5. ABC Corporation donated seven boxes of new jackets (from inventory) to the Salvation Army, which cost them $2,000 to manufacture two years ago. ABC Corp has a total taxable income of $100,000 and the seven boxes of jackets have a FMV of $4,000. Which of the following are true statements?

I. ABC Corp's maximum allowable charitable deduction is $10,000.
II. ABC Corp's charitable deduction for the jackets is $4,000.
III. ABC Corp's charitable deduction for the jackets is $2,000.
IV. ABC Corp will have a $2,000 carry forward charitable deduction.

A) I and II only
B)
I and III only
C)
I, III and IV only
D) I and IV only

Answer Key
Related Articles
  1. Investing Basics

    Explaining Risk-Adjusted Return

    Risk-adjusted return is a measurement of risk for an investment or portfolio.
  2. Investing Basics

    Calculating the Margin of Safety

    Buying below the margin of safety minimizes the risk to the investor.
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  4. Mutual Funds & ETFs

    ETF Analysis: Guggenheim Enhanced Short Dur

    Find out about the Guggenheim Enhanced Short Duration ETF, and learn detailed information about this fund that focuses on fixed-income securities.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares Morningstar Small-Cap Value

    Find out about the Shares Morningstar Small-Cap Value ETF, and learn detailed information about this exchange-traded fund that focuses on small-cap equities.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI KLD 400 Social

    Find out about the iShares MSCI KLD 400 Social exchange-traded fund, and learn detailed information about its characteristics, suitability and recommendations.
  7. Mutual Funds & ETFs

    ETF Analysis: Guggenheim BulletShrs 2018 HY CorpBd

    Find out about the Guggenheim BulletShares 2018 High Yield Corporate Bond ETF, and get information about this ETF that focuses on high-yield corporate bonds.
  8. Mutual Funds & ETFs

    ETF Analysis: PowerShares DWA SmallCap Momentum

    Find out about the PowerShares DWA SmallCap Momentum Portfolio ETF, and explore detailed analysis the fund's characteristics, suitability and recommendations.
  9. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  10. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
RELATED TERMS
  1. Net Line

    The amount of risk that an insurance company retains after subtracting ...
  2. Political Risk Insurance

    Coverage that provides financial protection to investors, financial ...
  3. Maximum Drawdown (MDD)

    The maximum loss from a peak to a trough of a portfolio, before ...
  4. Gross Exposure

    The absolute level of a fund's investments.
  5. Priori Loss Estimates

    A technique used by insurance companies to calculate loss reserves.
  6. Value Of Risk (VOR)

    The financial benefit that a risk-taking activity will bring ...
RELATED FAQS
  1. Is my IRA/Roth IRA FDIC-Insured?

    The Federal Deposit Insurance Corporation, or FDIC, is a government-run agency that provides protection against losses if ... Read Full Answer >>
  2. Does index trading increase market vulnerability?

    The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
  3. What are common delta hedging strategies?

    The term delta refers to the change in price of an underlying stock or exchange-traded fund (ETF) as compared to the corresponding ... Read Full Answer >>
  4. How does being overweight in a particular sector increase risk to a portfolio?

    An investor who is overweight in a particular sector risks a loss in value for the portfolio if there is a downturn in that ... Read Full Answer >>
  5. What are the primary risks an investor should consider when investing in the retail ...

    The retail sector consists of companies operating in multiple industries such as specialty retail, general retail, food and ... Read Full Answer >>
  6. What risks do I face when investing in the insurance sector?

    Like all equity investments, insurance companies present investors with market risk. Insurance companies, like banks, also ... Read Full Answer >>
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!