Armando has AGI of $80,000 and makes the following charitable contributions: • $10,000 cash to American Heart Society.
• $ 8,000 cash to Redemption Church.
• $24,000 worth of AOL stock acquired in 2005 with a basis of $10,000 to Upper State University. What is Armando's maximum charitable deduction in the current year?

Question

Quizplus · Accepted Answer

Armando can deduct up to 60% of his AGI for cash contributions to public charities, which is $48,000 (60% of $80,000). However, for long-term capital gain property like the AOL stock, the deduction is limited to 30% of AGI, which is $24,000. The total deduction is the sum of cash contributions ($18,000) and the stock contribution ($24,000), totaling $42,000, but the maximum deduction is limited to $40,000 due to the 30% limit on the stock.

Armando Has AGI of $80,000 and Makes the Following Charitable