Ralph Reeves gave some stock that he owned to charity. The stock had a FMV of $40,000 and a basis of $32,000. His adjusted gross income is $100,000. Determine the allowed charitable contribution deduction and carryover under the following assumptions:
a. Given to a public charity, no election
b . Given to a public charity, elects the reduced contribution election
c. Given to private charity
d. Qualified appreciated stock given to private charity
A. Ralph can take derivation upto 30% of his AGI that is 100,000*30%=30,000. Anything in abundance of that should be convey forward to the following one year from now. Besides FMV will be considered for the measure of gift. Along these lines out of 42,000 , 30,000 can be guaranteed right now staying 12,000 in one year from now.
B. On the off chance that Ralph chooses the diminished commitment political decision, at that point cutoff of half of AGI is relevant that is 100,000*50%=50,000 and ralph can just guarantee the expense premise o the stock which is the expense. Thus ralph can just guarantee 32000 in the present year and there will be no remainder.
C. at the point when gift is made to a private cause breaking point of 20% of AGI is material. Thus Ralph can just guarantee 20% of FMV in the present year as reasoning remaining will be conveyed forward. In this way 20%* 100,000=20000 can be asserted right now staying 22000 will be conveyed forward to the following year.
D. Treatment of qualified acknowledged stock given to private foundation will be like gift given to an open cause which means cutoff of 30% will be relevant.
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