Heron Corporation,a calendar year C corporation,had an excess charitable contribution for 2014 of $5,000.In 2015,Heron made a further charitable contribution of $20,000.Heron's 2015 deduction is limited to $15,000 (10% of taxable income).The 2015 contribution must be applied first against the $15,000 limitation.

Question

Quizplus · Accepted Answer

Charitable contributions in excess of the limitation can be carried over to the next year for up to five years. Since Heron Corporation had an excess charitable contribution in 2014, it can use this carryover to offset the excess contribution made in 2015, allowing it to deduct $20,000. Therefore, the 2015 contribution should be applied first against the carryover amount, not the limitation for the current year, as stated in answer A.

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