Question

Required information [The following information applies to the questions displayed below.]

In addition to cash contributions to charity, Dean decided to donate shares of stock and a portrait painted during the earlier part of the last century. Dean purchased the stock and the portrait many years ago as investments. Dean reported the following recipients:

Charity	Property	Cost		FMV
State University	Cash	$	15,000	$	15,000
Red Cross	Cash		14,500		14,500
State History Museum	Antique painting		5,000		82,000
City Medical Center	Dell stock		28,000		17,000

Suppose Dean is a dealer in antique paintings and had held the painting for sale before the contribution. What is Dean's charitable contribution deduction for the painting in this situation (ignoring AGI limitations)?

What the amount of the Charitable contribution deduction?

Answer 1

Dean can deduct all of his tax contributions and the value of stock because the total does not exceed 50% AGI limit. Dean can deduct the lesser of (1) the value of the antique up to 30% AGI limit ($72000) or (2) the remaining below amount of deduction to reach the 50% limit ($73500 calculated below).Hence, Dean can deduct $118,500 this year consisting of cash of $29,500,stock of 17000 and the antiques of 72000 The remaining value of the antique $10,000 ($82,000 - $72,000) is carried over to next year subject to the 30 percent of AGI limit.

50% AGI limit		$120,000
50% contributions- cash	$29,500
50% contributions-stock	$17,000
total 50% contributions		$46,500
maximum remaining contributions to reach 50%		$73,500