Question

Calculate the maximum allowable contribution deduction for Year 2 before any adjusted gross income limitations. If an amount is zero, enter a zero (0).

Contributions made in Year 2 included the following:

• Cash to a local hospital: $2,000
• Cash to a war veteran's organization: $1,000
• Value of services rendered to a local history museum: $800
• Publicly traded stock held for 11 months (FMV – $6,000; Cost – $4,000) to a community college
• Voluntary cash contribution to a country club for environmental issue: $500

Answer 1

Allowable contributions:

This includes medical expense, charity to a non-profit organization, interest payment, etc.

Maximum deduction

Items	Amount
Medical expense, as cash paid to hospital	$2,000
Charity to non-profit organization, war veteran	$1,000
Value of service to museum	0
Publicly traded stock	0
Cash to a country club	0
Total deductions	$3,000 (Answer)

Notes:

Value of service is not a cash transaction; therefore, this should not be considered.

Publicly traded stock is not a part of this deduction.

A country club is for-profit organization; therefore, charity to such club should not be considered.