Question

Helga had AGI of $135,000 in 2018. She donated corporate stock with a basis of $28,000 to a qualified charitable organization on April 3, 2018.

a. What is the amount of Helga's deduction assuming that she purchased the stock on June 15, 2017, and the stock had a fair market value of $26,000 when she made the donation?
Helga's deduction is $________.

b. Assuming that she purchased the stock on January 15, 2017, and the stock had a fair market value of $33,000 when she made the donation, Helga's deduction is $_______.

c. Assuming that she purchased the stock on January 15, 2018, and the stock had a fair market value of $29,000 when she made the donation to the charity, Helga's deduction is $_______.

Answer 1

Ans:

1) Deduction for contributions If it is capital gain Then fair Market Value Can be deductible

2) Deduction for Contribution If it is ordinary Income I.e other than capital asset, then Equal to the least of adjusted basis value or Fair Market Value shall be deductible

A)

Ans: As per 2 above, It is ordinary Income Property so Least of Adjusted Basis value or Fair Market Value shall be deductible

$28,000 or $26,000

Therefore $26,000 Is deductible

B)

Ans: As per 1 above ,It is long term asset so The fair market value should be deducted i.e $33,000

C)

Ans: As per 1 above ,It is long term asset so The fair market value should be deducted i.e $29,000