Question

John Jones has adjusted gross income of $50,000. During 2017, John contributed $6,000 in cash to...

John Jones has adjusted gross income of $50,000. During 2017, John contributed $6,000 in cash to his church and stock with a fair market value of $40,000 to the Girl Scouts. The stock had cost John $36,000. What is John's charitable contribution deduction for 2017? If John elects the optional reduction of the stock contribution, what would be his charitable contribution deduction for 2017?

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Answer #1

a) John's Charitable deduction for the year is $ 21000

$ 6000 cash contribution(Limited to 50% of AGI)= $6000

$ 40000 Stock Contribution(Limited to 30% of AGI) =$15000

Total charitable contribution = $ 21000

b)If john elects optional reduction of the stock contribution, his charitable contribution deduction for 2017 will be $ 25000 computed below.

$ 6000 Cash contribution(Limited to 50% of AGI)= $ 6000

$ 36000 Stock contribution(Limited to 50% of AGI less cash contribution)= $19000

Total charitable contribution = $25000

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