Patricia's AGI was $80,000 in both 2018 and 2019.She made cash contributions to public charities of $43,000 in 2018 and $50,000 in 2019.Patricia's charitable contribution carryover to 2020 is:

Question

Quizplus · Accepted Answer

The correct answer is A because the charitable contribution deduction is limited to 50% of AGI. In 2018, Patricia's deduction was limited to $40,000 (50% of $80,000), so she had a carryover of $3,000. In 2019, her deduction was limited to $40,000, so she had a carryover of $10,000. The total carryover to 2020 is $13,000, but it is limited to 5% of AGI, which is $4,000. Therefore, Patricia's charitable contribution carryover to 2020 is $2,000.

Patricia's AGI Was $80,000 in Both 2018 and 2019