Eagle, Inc. made a contribution to the Boy Scouts of $25,000 during its current tax year. The corporation's taxable income before any charitable contribution deduction was $200,000. The corporation has a current charitable contribution deduction of $25,000.

Question

Quizplus · Accepted Answer

The maximum deduction for charitable contributions for corporations is limited to 10% of their taxable income before the deduction. Therefore, Eagle, Inc. can only deduct $20,000 (10% of $200,000) in the current tax year, not the full $25,000 contributed.