During the current year,Kingbird Corporation (a calendar year C corporation)had the following income and expenses: On October 1,Kingbird Corporation made a contribution to a qualified charitable organization of $9,000 in cash (not included in any of the above items).Determine Kingbird's charitable contribution deduction for the current year.
A)$9,000.
B)$7,500.
C)$6,650.
D)$6,450.
E)None of the above.

Question

During the current year,Kingbird Corporation (a calendar year C corporation)had the following income and expenses:  On October 1,Kingbird Corporation made a contribution to a qualified charitable organization of $9,000 in cash (not included in any of the above items).Determine Kingbird's charitable contribution deduction for the current year.
A)$9,000. 
B)$7,500. 
C)$6,650. 
D)$6,450. 
E)None of the above.

Quizplus · Accepted Answer

Kingbird Corporation's taxable income before charitable contributions is $54,000 ($60,000 - $3,000 - $3,000). The maximum charitable contribution deduction allowed for a corporation is 10% of its taxable income before charitable contributions. Therefore, Kingbird can deduct up to $5,400 ($54,000 x 10%) in charitable contributions. Since Kingbird actually contributed $9,000, its charitable contribution deduction is limited to $7,500 ($5,400 + $2,100).

During the Current Year,Kingbird Corporation (A Calendar Year C Corporation)had