Question

# Marco, a calendar-year taxpayer, made the following charitable contributions in the current year: Cash to the...

Marco, a calendar-year taxpayer, made the following charitable contributions in the current year: Cash to the church \$5,000 FMV; Unimproved land (with cost basis of \$30,000) to the local college \$70,000 FMV. The land had been held as an investment by Marco for 5 years. If Marco's AGI is \$120,000 and if he wants to maximize his charitable contribution deduction in the current year, what is Marco's maximum allowable charitable contribution deduction for the current year?

A) \$35,000

B) \$41,000

C) \$60,000

D) \$75,000

Marco's maximum allowable charitable contribution deduction for the current year woul be \$ 41000

Calculation is as below:

 Particulars Total Amount (\$) Allowable amount (\$) Remarks Cash paid to Church 5000 5000 Cash donated to church is considered first and is fully deductible Land contribution 70000 (FMV) 36000 Deduction for land is limited to 30% of AGI = 30% X 120000 = 36000 TOTAL 41000 Total allowable contribution should not exceed 50% of AGI = 50% X 120000 = 60000