Question

Deonte's records reflect the following information:

1.​Paid $300 dues to a fraternal organization (such as the Moose Lodge).

2.​Donated stock having a fair market value of $4,000 to a qualified charitable organization. He purchased the stock six months earlier for $3,000.

3.​Paid $2,000 cash to qualified public charitable organizations.

Deonte's adjusted gross income for this year was $75,000. What is the amount of his charitable contribution deduction for the year?

A) $2,000

B) $5,000

C) $6,000

D) $6,300

Answer 1

The answer to the question is option B =$5000

The amount of deduction which shall be considered as donation will be

Stocks donated and cash donated . Dues paid are not considered to be donation , donation is a selfless act where you just give money to an organisation where you dont owe anything

Amount of stock considered for donation is $3000 and not fair value $4000 , as it was purchased only 6 months ago and , if the stock is purchased for less than a year at the time of donation , Cost vlaue is to be considered and not fair value

And cash equivalent made to a qualified charitable trust is to be considered

This results in the total charitable contribution to be $5000

So the correct option is Option B