In February of the current year, Brent Corporation donates computer equipment that it purchased six months ago to Eastside High School for use in its educational program. The donated property had a $20,000 adjusted basis to Brent and a $40,000 FMV. What is the amount of the gift?
A)$20,000
B)$30,000
C)$35,000
D)$50,000

Question

Quizplus · Accepted Answer

The amount of the gift is based on the FMV of the donated property, which is $40,000. However, since Brent Corporation has held the property for less than one year before donating it, they can only deduct the adjusted basis of $20,000 as a charitable contribution. Therefore, the amount of the gift for tax purposes is $20,000 + $20,000 = $30,000.

In February of the Current Year, Brent Corporation Donates Computer