Question

In 2020, Webtel Corporation donated $58,500 to a qualifying charity. For the year, it reported taxable income of $395,000, which included the following: the $58,500 charitable contribution (before limitation), a $117,000 dividends received deduction, and a $21,700 net operating loss carryover. What is Webtel Corp.'s charitable contribution deduction assuming it does not elect to apply the 25% of modified taxable limitation in determining its charitable contribution deduction

Answer 1

#ANSWER:

Webtel's charitable contribution deduction for the year = $ 37,330

Step - By - Step Explanatio.

Calculation of charitable contribution deduction for the year.

	Explanation	Amount ($)
Webtel's taxable income for chritable contribution limitation purposes	Reported taxable income - Net operating loss carryover =$ 395,000 - $ 21,700	373,300
Webtel's charitable contribution deduction for the year	Webtel's may deduct up to 10% of taxable income. = 10% x $ 373,300	37,330