Jennifer,a calendar year taxpayer,made the following donations to qualified charitable organizations in 2011: The land had been held as an investment and was acquired 3 years ago.Shortly after receipt,the City of Columbus sold the land for $240,000.Jennifer's AGI is $400,000.The allowable charitable contribution deduction is:

Question

Jennifer,a calendar year taxpayer,made the following donations to qualified charitable organizations in 2011:  The land had been held as an investment and was acquired 3 years ago.Shortly after receipt,the City of Columbus sold the land for $240,000.Jennifer's AGI is $400,000.The allowable charitable contribution deduction is:

Quizplus · Accepted Answer

Jennifer's contribution of the appreciated property is limited to 30% of her AGI, since it is considered a capital asset held for more than a year.

Her charitable contribution deduction is calculated as follows:

Fair market value of the land: $200,000

30% of Jennifer's AGI: ($400,000 x 30%) = $120,000

Allowable deduction: Lesser of fair market value or 30% of AGI

Therefore, Jennifer's allowable deduction is $160,000 (the lesser of $200,000 and $120,000).

The reduced deduction election does not apply since Jennifer did not contribute more than 20% of her AGI.

Jennifer,a Calendar Year Taxpayer,made the Following Donations to Qualified Charitable