Remsco has taxable income of $69,000 and a charitable contribution limit modified taxable income of $76,500. Its charitable contributions for the year were $7,860. What is Remsco's current-year charitable contribution deduction and contribution carryover(assuming Remsco does not elect to use the 25% of modified taxable income to determine its charitable contribution deduction)?

Question

Quizplus · Accepted Answer

To calculate the current-year charitable contribution deduction, first, we have to find the 10% of the taxable income, which is $6,900. As the modified taxable income is higher than the taxable income, we use the modified taxable income limit of $76,500 to calculate the deduction limit, which is $7,650 (10% of $76,500). As the actual contribution made by Remsco is lower than the deduction limit, the current-year deduction will be $7,860 (the actual contribution made).

To determine the contribution carryover, we subtract the current-year deduction from the deduction limit, which is $7,650 - $7,860 = ($210). As this is a negative amount, there is no contribution carryover. Therefore, the correct answer is D.

Remsco Has Taxable Income of $69,000 and a Charitable Contribution