During the current year,Kingbird Corporation (a calendar year C corporation)had the following income and expenses: On October 1,Kingbird Corporation made a contribution to a qualified charitable organization of $9,000 in cash (not included in any of the above items).Determine Kingbird's charitable contribution deduction for the current year.
A)$9,000.
B)$7,500.
C)$6,650.
D)$6,450.
E)None of the above.

Question

During the current year,Kingbird Corporation (a calendar year C corporation)had the following income and expenses:  On October 1,Kingbird Corporation made a contribution to a qualified charitable organization of $9,000 in cash (not included in any of the above items).Determine Kingbird's charitable contribution deduction for the current year.
A)$9,000. 
B)$7,500. 
C)$6,650. 
D)$6,450. 
E)None of the above.

Quizplus · Accepted Answer

Kingbird Corporation can deduct charitable contributions up to 25% of its taxable income. In this case, taxable income is $28,000 ($75,000 - $28,500 - $18,000 - $500). Therefore, Kingbird Corporation's maximum deduction for charitable contributions is $7,000 ($28,000 x 25%). Since Kingbird Corporation made a contribution of $9,000, it can deduct $7,500 ($7,000 is the maximum allowed) as a charitable contribution on its tax return for the current year.

During the Current Year,Kingbird Corporation (A Calendar Year C Corporation)had