During 2012, Ralph made the following contributions to the University of Oregon (a qualified charitable organization): Ralph acquired the stock in Raptor, Inc., as an investment fourteen months ago at a cost of $42,000. Ralph's AGI for 2012 is $189,000. What is Ralph's charitable contribution deduction for 2012?

Question

During 2012, Ralph made the following contributions to the University of Oregon (a qualified charitable organization):  Ralph acquired the stock in Raptor, Inc., as an investment fourteen months ago at a cost of $42,000. Ralph's AGI for 2012 is $189,000. What is Ralph's charitable contribution deduction for 2012?

Quizplus · Accepted Answer

Ralph's charitable contribution deduction for the stock will be equal to the fair market value of the stock at the time of the contribution, which is $126,000 ($35/share x 3,600 shares). Since the stock was held for more than a year, Ralph can deduct the full fair market value, up to 30% of his AGI.
30% of Ralph's AGI is $56,700 ($189,000 x 0.3). Since his charitable contribution deduction exceeds this limit, he can deduct up to the limit and carry forward the excess for up to five years. Therefore, Ralph's charitable contribution deduction for 2012 is $94,500 ($56,700 + $37,800).

During 2012, Ralph Made the Following Contributions to the University