Karen, a calendar year taxpayer, made the following donations to qualified charitable organizations during the year: $\begin{array}{lcr}
& \text {Basis}& \text { Fair Market}\
&& \text {Value}\
\text { Cash donation to State University } & \$ 30,000 & \$ 30,000 \
\text { Unimproved land to the City of Terre Haute, } & 70,000 & 210,000 \
\text { Indi ana } & &
\end{array}$ ? The land had been held as an investment and was acquired 4 years ago.Shortly after receipt, the City of Terre Haute sold the land for $210,000.Karen's AGI is $450,000.The allowable charitable contribution deduction this year is:

Question

Quizplus · Accepted Answer

The allowable charitable contribution deduction is $165,000. This is calculated by adding the cash donation of $30,000 to the basis of the unimproved land, $70,000, since the land was sold immediately by the charity, preventing the use of its fair market value for deduction purposes. The total AGI limitation for charitable contributions (cash and property) is 60% for cash to public charities and 30% for appreciated property to public charities. However, since the land's deduction is limited to its basis (not its appreciated value), the relevant limit here is effectively the cash contribution limit, but the total contributions do not exceed either limit based on Karen's AGI.

Karen, a Calendar Year Taxpayer, Made the Following Donations to Qualified