Corner Grocery, Inc., a C corporation with high taxable income, donates some of its inventory to the County Food Bank (a charitable organization) which distributes food to the needy. At the time of the contribution, the FMV of the inventory was $20,000, and Corner Grocery's basis was $12,000. Corner Grocery will be allowed a charitable contribution deduction of

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Quizplus · Accepted Answer

For C corporations donating inventory to a qualified charity, the deduction is the lesser of FMV or basis plus half the appreciation, but not more than twice the basis. Here, $12,000 + ($20,000 - $12,000)/2 = $16,000.