Heron Corporation,a calendar year C corporation,had an excess charitable contribution for 2012 of $5,000.In 2013,Heron made a further charitable contribution of $20,000.Heron's 2013 deduction is limited to $15,000 (10% of taxable income).The current year's contribution must be applied first against the $15,000 limitation.

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According to IRS rules, when a corporation has an excess charitable contribution in one year, it can be carried over for up to five years to offset future taxable income. Therefore, Heron Corporation can apply the $5,000 excess contribution from 2012 towards the $20,000 contribution made in 2013. However, the total deduction for 2013 is limited to $15,000, which is 10% of Heron's taxable income. Therefore, the remaining $10,000 of the 2013 contribution cannot be deducted in the current year and will have to be carried over to future years.

Heron Corporation,a Calendar Year C Corporation,had an Excess Charitable Contribution