Richards Corporation has taxable income of $280,000 calculated before the charitable contribution deduction and before its dividends-received deduction of $34,000. Richards makes cash contributions of $35,000 to charitable organizations. What is Richards Corporation's charitable contribution deduction for the current year?

Question

Quizplus · Accepted Answer

The charitable contribution deduction for corporations is limited to 10% of their taxable income before the charitable contribution deduction and before the dividends-received deduction. Richards Corporation's taxable income before these deductions is $280,000. Therefore, the maximum deductible charitable contribution is 10% of $280,000, which equals $28,000.

Richards Corporation Has Taxable Income of $280,000 Calculated Before the Charitable