Pluto Corporation contributes $30,000 to qualified charitable organizations during 2017.Pluto's 2017 taxable income before any charitable contribution deduction is $280,000.Included in that amount is a $10,000 dividend-received deduction amount.Pluto also has a carryover charitable contribution of $2,000 from 2016.What is the maximum amount Pluto Corporation can deduct as a charitable contribution for 2017?
A)$- 0 -
B)$28,000
C)$29,000
D)$30,000
E)$35,000

Question

Quizplus · Accepted Answer

The maximum amount of charitable contribution Pluto Corporation can deduct is calculated as follows:
- Start with Pluto's taxable income before any charitable contribution deduction: $280,000
- Subtract the dividend-received deduction amount: $280,000 - $10,000 = $270,000
- Calculate 10% of Pluto's taxable income after subtracting the dividend-received deduction: $270,000 x 10% = $27,000
- Add the carryover charitable contribution amount from 2016: $27,000 + $2,000 = $29,000
- The total deductible charitable contribution cannot exceed the total charitable contributions made during the year, so the maximum amount Pluto can deduct is $29,000 (choice C).

Pluto Corporation Contributes $30,000 to Qualified Charitable Organizations During 2017