Hannah makes the following charitable donations in the current year: The HBM stock and the inventory were given to Hannah's church,and the baseball card collection was given to the United Way.Both donees promptly sold the property for the stated fair market value.Disregarding percentage limitations,Hannah's current charitable contribution deduction is:
A)$28,000.
B)$51,200.
C)$52,000.
D)$67,200.
E)None of these.

Question

Hannah makes the following charitable donations in the current year:  The HBM stock and the inventory were given to Hannah's church,and the baseball card collection was given to the United Way.Both donees promptly sold the property for the stated fair market value.Disregarding percentage limitations,Hannah's current charitable contribution deduction is:
A)$28,000. 
B)$51,200. 
C)$52,000. 
D)$67,200. 
E)None of these.

Quizplus · Accepted Answer

Inventory is ordinary income property,but the fair market value ($7,200)must be used if lower than the basis ($8,000).Stock is intangible property and is not subject to the tangible personalty rules.Since a sale of the HBM stock would have yielded a long-term capital gain,the full fair market value qualifies for the deduction ($40,000).The baseball card collection comes under the tangible personalty exception,and the adjusted basis ($4,000)must be used.Thus,$51,200 may be deducted as a charitable contribution ($7,200 + $40,000 + $4,000 = $51,200).

Hannah Makes the Following Charitable Donations in the Current Year