What is Beth's maximum allowable deduction for the following contributions to qualified public charities during the current year if her adjusted gross income is $90,000?

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Quizplus · Accepted Answer

Beth's maximum allowable deduction for charitable contributions is limited to 60% of her adjusted gross income ($90,000 x 60% = $54,000). However, she must also reduce this amount by any contributions for which she received a benefit, such as goods or services. If Beth did not receive any benefit from her charitable contributions, her maximum deduction would be $54,000. However, since the question does not provide information about Beth receiving any benefit, we can assume that she did receive a benefit and therefore must further reduce her maximum deduction. The amount of reduction depends on the value of the benefit received. Without this information, the safest choice is to select the option that is lower than the maximum deduction allowed without regard to any benefit received, which in this case is $27,000 (60% of $90,000). Therefore, the best choice is C.

What Is Beth's Maximum Allowable Deduction for the Following Contributions