Karen,a calendar year taxpayer,made the following donations to qualified charitable organizations during the year:
Basis
Fair Market Value
Cash donation to State University
$30,000
$ 30,000
Unimproved land to the City of Terre Haute,Indiana
70,000
210,000

The land had been held as an investment and was acquired 4 years ago.Shortly after receipt,the City of Terre Haute sold the land for $210,000.Karen's AGI is $450,000.The allowable charitable contribution deduction this year is:
A)$100,000.
B)$165,000.
C)$225,000.
D)$240,000.
E)None of the above.

Question

Karen,a calendar year taxpayer,made the following donations to qualified charitable organizations during the year:
Basis
Fair Market Value
Cash donation to State University
$30,000
$ 30,000
Unimproved land to the City of Terre Haute,Indiana
70,000
210,000
​
The land had been held as an investment and was acquired 4 years ago.Shortly after receipt,the City of Terre Haute sold the land for $210,000.Karen's AGI is $450,000.The allowable charitable contribution deduction this year is:
A)$100,000.
B)$165,000.
C)$225,000.
D)$240,000.
E)None of the above.

Quizplus · Accepted Answer

Karen can deduct the full amount of the cash donation ($30,000) and the fair market value of the land ($210,000) since it was held for more than one year. However, the deduction for appreciated property is limited to 30% of AGI, which is $135,000. Therefore, the total allowable deduction is $30,000 (cash) + $135,000 (land) = $165,000.

Karen,a Calendar Year Taxpayer,made the Following Donations to Qualified Charitable