Stewart had adjusted gross income of $22,000 in 2016. During the year, he made the following contributions to qualified charities: - $7,000 cash
- 1,000 shares of Able Corporation common stock, acquired in 1980 (cost and fair market value of $5,000)

Considering the charitable contribution deduction limitation, what amount can Stewart claim as a deduction for charitable contributions in 2016?

Question

Stewart had adjusted gross income of $22,000 in 2016. During the year, he made the following contributions to qualified charities: ​- $7,000 cash
​- 1,000 shares of Able Corporation common stock, acquired in 1980 (cost and fair market value of $5,000)
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Considering the charitable contribution deduction limitation, what amount can Stewart claim as a deduction for charitable contributions in 2016?

Quizplus · Accepted Answer

The charitable contribution deduction for cash contributions is limited to 50% of AGI. Therefore, Stewart can deduct $7,000 for the cash donation. The deduction for non-cash contributions, such as stock, is limited to 30% of AGI. Since the fair market value of the stock is $5,000, Stewart can deduct $1,500 ($5,000 x 30%). Therefore, the total deduction for charitable contributions is $8,500 ($7,000 + $1,500).

Stewart Had Adjusted Gross Income of $22,000 in 2016