Heron Corporation, a calendar year C corporation, had an excess charitable contribution for 2018 of $5,000. In 2019, Heron made a further charitable contribution of $20,000. Heron's 2019 deduction is limited to $15,000 (10% of taxable income). The 2019 contribution must be applied first against the $15,000 limitation.

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The IRS rules for C corporations stipulate that current year charitable contributions are applied first against the deduction limit. Any excess contributions, such as the $5,000 from 2018, can only be carried forward if the current year's contributions do not exceed the limit. Since Heron's 2019 contribution of $20,000 exceeds the $15,000 limit, the 2018 excess cannot be used in 2019.

Heron Corporation, a Calendar Year C Corporation, Had an Excess