Karen, a calendar year taxpayer, made the following donations to qualified charitable organizations during the year:
$\begin{array}{lrr}
& \text {Basis}&\text {Fair Market Value}\
\text { Cash donation to State University } & \$ 30,000 & \$ 30,000 \
\text { Unimproved land to the City of Terre Haute, Indiana } & 70,000 & 210,000
\end{array}$

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 is:

Question

Karen, a calendar year taxpayer, made the following donations to qualified charitable organizations during the year:
$\begin{array}{lrr}
&  \text {Basis}&\text {Fair Market Value}\ 
\text { Cash donation to State University } & \$ 30,000 & \$ 30,000 \
\text { Unimproved land to the City of Terre Haute, Indiana } & 70,000 & 210,000
\end{array}$

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 is:

Quizplus · Accepted Answer

The deduction for donations of long-term capital gain property is the fair market value of the property, not to exceed 30% of the taxpayer's AGI. In this case, the land donated had a fair market value of $250,000 and Karen's AGI is $450,000. Therefore, the maximum deduction for this donation is $135,000. However, since the fair market value of the donated property exceeds $5,000, Karen must obtain a qualified appraisal of the property and attach it to her tax return. The reduced deduction election does not apply to donations of long-term capital gain property, so the allowable charitable contribution deduction is $135,000.

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