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8) Green Corporation is not a personal service corporation. In 2018, it calculates taxable income of...

8) Green Corporation is not a personal service corporation. In 2018, it calculates taxable income of $75,000. Included in this amount is $15,000 of charitable contributions made.

a) How much of the $15,000 of charitable contributions can Green Corporation deduct in 2018?

b) Is there a limitation? If so, how much can Green Corporation carryforward to subsequent years?

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Answer #1

There are limits on charitable deductions: If you contribute more than 20% of your adjusted gross income (AGI), found on line 37 of your form 1040 for 2017 (the form isn’t yet available for 2018), pay attention to limits.

a) 20 % of adjusted gross total income =75000*20 %

=15000 $.

allowable deduction =15000 $

b)

You can carry over your contributions that you are not able to deduct in the current tax year because they exceed your adjusted-gross-income limits. You can deduct the excess in each of the next 5 years until it is all used, but not beyond that time.

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