Corey Corporation reported the following results for the current year: What is the amount of the charitable contribution carryover to next year?

Question

Corey Corporation reported the following results for the current year:  What is the amount of the charitable contribution carryover to next year?

Quizplus · Accepted Answer

The charitable contribution carryover is the excess of the charitable contributions made by the corporation over the allowable limit for the current year. In this case, the allowable limit for the current year is 10% of taxable income, which is $12,000 ($120,000 x 10%). Since the corporation made charitable contributions of $26,000, the excess over the allowable limit is $14,000 ($26,000 - $12,000). Therefore, the amount of the charitable contribution carryover to next year is $14,000.

Corey Corporation Reported the Following Results for the Current Year