Millicent makes a gift of an organ to a church.Millicent uses the organ in her trade or business.The organ has a FMV of $6,500; a cost of $11,000; and $7,000 depreciation claimed.What is the amount of Millicent's charitable contribution deduction?

Question

Quizplus · Accepted Answer

Millicent's charitable contribution deduction is calculated as follows: 
Cost Basis (11,000) - Accumulated Depreciation (7,000) = Adjusted Basis (4,000). 
Since she used the organ in her trade or business, she can only deduct the fair market value (FMV) of the organ as a charitable contribution. Therefore, her deduction is limited to the FMV of $6,500 minus the Adjusted Basis of $4,000, which equals $2,500.

Millicent Makes a Gift of an Organ to a Church