Question

Susan's will states in part "I devise the sum of $20,000 to the American Heart Association." The devise is paid by Susan's personal representative.

a. Susan's estate will be entitled to a $20,000 charitable income tax deduction.

b. Susan's estate will not be entitled to a charitable income tax deduction..

c. Susan's estate will be entitled to a $20,000 charitable income tax deduction provided the $20,00 devise does not exceed the charitable deduction percentage limitation.

d. Susan's estate will be entitled to a $20,000 charitable income tax deduction but only if paid in full in the first income tax year of the estate.

Answer 1

Susan's estate will be entitled to a $20,000 charitable income tax deduction provided the $20,000 devise does not exceed the charitable deduction percentage limitation.

Correct option is (c)

The amount of charitable deduction cannot exceed 50% of adjusted gross income of the tax payer. Hence, Susan's estate will be entitled to a $20,000 charitable income tax deduction provided the $20,000 devise does not exceed 50% of adjusted gross income of Susan's estate.

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