Question

31. Charitable contributions have limits that a taxpayer may deduct in a given tax year. Identify the incorrect statement regarding the limitations from the following listed items.: A. 50% of AGI to a public charity for gifts of inventory. B. 20% of AGI for long term capital gain property donated to a family foundation. C. 20% of AGI for such indirect gifts as mileage. D. 50% of AGI for gifts of short term capital gain property to a public charity.

Answer 1

Solution:-

31. Charitable contributions have limits that a taxpayer may deduct in a given tax year. Identify the incorrect statement regarding the limitations from the following listed items:-

B. 20% of AGI for long term capital gain property donated to a family foundation.

Explanation:-

A second 30% AGI limit applies to gifts of long-term (held longer than one year) capital gain property made to a 50% public charity. This 30% limit does not apply if the donor uses their lower cost basis in the property as the gift value instead of the market value.