Stewart had adjusted gross income of $22,000 in 2019. During the year, he made the following contributions to qualified charities: - $7,000 cash
- 1,000 shares of Able Corporation common stock, acquired in 2010 (cost and fair market value of $5,000)
Considering the charitable contribution deduction limitation, what amount can Stewart claim as a deduction for charitable contributions in 2019?
A)$5,000
B)$7,000
C)$11,000
D)$12,000
E)None of these

Question

Quizplus · Accepted Answer

Stewart's maximum charitable contribution deduction is limited to 60% of his adjusted gross income, or $13,200 ($22,000 x 60%).

The cash contribution of $7,000 can be fully deducted in the current year since it does not exceed the 60% limitation.

For the donation of the Able Corporation shares, the deduction is limited to its fair market value of $5,000 since it is a long-term capital asset and the contribution exceeds the 30% limitation for securities.

Therefore, the total amount that Stewart can claim as a deduction for charitable contributions in 2019 is $11,000 ($7,000 + $5,000).

Stewart Had Adjusted Gross Income of $22,000 in 2019