Larry recorded the following donations this year: $670 cash to a family in need
$2,570 to a church
$670 cash to a political campaign
To the Salvation Army household items that originally cost $1,370 but are worth $470.
What is Larry's maximum allowable charitable contribution if his AGI is $61,700?

Question

Quizplus · Accepted Answer

Larry's maximum allowable charitable contribution is calculated by multiplying his AGI by 60%, or 0.60, since he can only deduct up to 60% of his AGI in charitable donations.

$61,700 x 0.60 = $37,020

We then add up all of Larry's charitable donations:

$670 + $2,570 + $670 + $470 = $4,380

Since $4,380 is less than $37,020, Larry's maximum allowable charitable contribution is $4,380.

However, we must also take into account the donation of household items that were originally worth $1,370 but are now worth $470. Since Larry can only deduct the fair market value of the items, he can only deduct the current value of $470.

$4,380 + $470 = $3,850

Thus, the maximum allowable charitable contribution for Larry is $3,850.

The only answer choice that is close to this amount is C) $3,040.

Larry Recorded the Following Donations This Year: $670 Cash to a Family