Stewart had adjusted gross income of $22,000 in 2015. During the year, he made the following contributions to qualified charities:
$7,000 cash

1,000 shares of Able Corporation common stock, acquired in 1980 (cost and fair market value of $5,000)

Considering the charitable contribution deduction limitation, what amount can Stewart claim as a deduction for charitable contributions in 2015?

Question

Stewart had adjusted gross income of $22,000 in 2015. During the year, he made the following contributions to qualified charities: ​
$7,000 cash
​
1,000 shares of Able Corporation common stock, acquired in 1980 (cost and fair market value of $5,000)
​
Considering the charitable contribution deduction limitation, what amount can Stewart claim as a deduction for charitable contributions in 2015?

Quizplus · Accepted Answer

Stewart's total charitable contributions for the year were $12,000 ($7,000 cash + $5,000 stock). However, the deduction for charitable contributions is limited to a percentage of the taxpayer's adjusted gross income (AGI). For individuals, the limit is generally 50% of AGI, but it can be lower for certain types of donations or organizations. In this case, since Stewart's AGI is $22,000, the maximum deduction for charitable contributions is $11,000 (50% of $22,000). Therefore, the correct answer is C.

Stewart Had Adjusted Gross Income of $22,000 in 2015