Homework SourseMarco a calendaryear taxpayer made the following charitable
Marco, a calendar-year taxpayer, made the following charitable contributions in the current year: Cash to the church $5,000 FMV; Unimproved land (with cost basis of $30,000) to the local college $70,000 FMV. The land had been held as an investment by Marco for 5 years. If Marco\'s AGI is $120,000 and if he wants to maximize his charitable contribution deduction in the current year, what is Marco\'s maximum allowable charitable contribution deduction for the current year?
A) $35,000
B) $41,000
C) $60,000
D) $75,000
Solution
Marco\'s maximum allowable charitable contribution deduction for the current year woul be $ 41000
Calculation is as below:
Deduction for land is limited to 30% of AGI
= 30% X 120000 = 36000
Total allowable contribution should not exceed 50% of AGI
= 50% X 120000 = 60000
| Particulars | Total Amount ($) | Allowable amount ($) | Remarks |
| Cash paid to Church | 5000 | 5000 | Cash donated to church is considered first and is fully deductible |
| Land contribution | 70000 (FMV) | 36000 | Deduction for land is limited to 30% of AGI = 30% X 120000 = 36000 |
| TOTAL | 41000 | Total allowable contribution should not exceed 50% of AGI = 50% X 120000 = 60000 |
