During the current year, Ralph made the following contributions to the University of Oregon (a qualified charitable organization): $$\begin{array} { l r }
\text { Cash } & \$ 63,000 \
\text { Stock in Raptor, Inc. (a publicly traded corporation) } & 94,500
\end{array}$$ Ralph acquired the stock in Raptor as an investment 14 months ago at a cost of $42,000.Ralph's AGI for the year is $189,000.What is his charitable contribution deduction for the current year?
A)$56,700
B)$63,000
C)$94,500
D)$157,500
E)None of these

Question

During the current year, Ralph made the following contributions to the University of Oregon (a qualified charitable organization): $$\begin{array} { l r } 
\text { Cash } & \$ 63,000 \
\text { Stock in Raptor, Inc. (a publicly traded corporation) } & 94,500
\end{array}$$ Ralph acquired the stock in Raptor as an investment 14 months ago at a cost of $42,000.Ralph's AGI for the year is $189,000.What is his charitable contribution deduction for the current year?
A)$56,700
B)$63,000
C)$94,500
D)$157,500
E)None of these

Quizplus · Accepted Answer

Since Ralph contributed appreciated stock held for more than one year, his charitable contribution deduction is the fair market value of the stock on the date of the contribution. The fair market value of the stock is $126,000 (3,000 shares x $42 per share). Since Ralph's AGI is $189,000, he can deduct up to 50% of his AGI in charitable contributions, which in this case is $94,500 (50% x $189,000). Therefore, his charitable contribution deduction for the current year is $94,500.

During the Current Year, Ralph Made the Following Contributions to the University