Grocer Services Corporation (a calendar year taxpayer),a wholesale distributor of food,made the following donations to qualified charitable organizations during the year:

How much qualifies for the charitable contribution deduction?
A)$21,800.
B)$24,840.
C)$24,100.
D)$22,450.
E)None of the above.

Question

Grocer Services Corporation (a calendar year taxpayer),a wholesale distributor of food,made the following donations to qualified charitable organizations during the year:

How much qualifies for the charitable contribution deduction?
A)$21,800. 
B)$24,840. 
C)$24,100. 
D)$22,450. 
E)None of the above.

Quizplus · Accepted Answer

Since Grocer Services is a corporation and the inventory exception is met,one-half of the appreciation on the food may be claimed,or $650 [1/2 of ($7,800 - $6,500)].Therefore,$7,150 ($6,500 + $650 appreciation)is allowed as a deduction.Because the Acme stock is long-term capital gain property and not tangible personalty,the deduction is based on fair market value ($9,200).The deduction for the delivery van,which is not a capital asset,is limited to the lesser of adjusted basis or fair market value ($6,100).Thus,$7,150 + $9,200 + $6,100 = $22,450.

Grocer Services Corporation (A Calendar Year Taxpayer),a Wholesale Distributor of Food,made