Madeoff donated stock (capital gain property) to a public charity. He purchased the stock 3 years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000. What is his maximum charitable contribution deduction for the year related to this stock if his AGI is $500,000 (before considering the itemized deduction phase-out)?
A) $100,000.
B) $200,000.
C) $150,000.
D) $250,000.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The maximum charitable contribution deduction for capital gain property is limited to 30% of the donor's AGI. In this case, 30% of $500,000 is $150,000. Therefore, the maximum charitable contribution deduction for this stock is $150,000, even though its fair market value is $200,000. The answer is not A because $100,000 was the cost basis of the stock and not the fair market value at the time of the gift. The answer is not B because the maximum charitable contribution deduction is limited to 30% of AGI. The answer is not D because the maximum charitable contribution deduction is limited to 30% of AGI. The answer is not E because there is a correct choice, which is C.

Madeoff Donated Stock (Capital Gain Property) to a Public Charity