Pluto Corporation contributes $30,000 to qualified charitable organizations during 2013.Pluto's 2013 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 $2,000 from 2012.What is the maximum amount Pluto Corporation can deduct as a charitable contribution for 2013?
A)$ - 0 -
B)$28,000
C)$29,000
D)$30,000
E)$35,000

Question

Quizplus · Accepted Answer

The maximum amount of charitable contribution that can be deducted in a given year is limited to 10% of the corporation's taxable income before the charitable contribution deduction is taken. In this case, 10% of $280,000 (Pluto's taxable income before charitable contribution deduction) is $28,000. However, since Pluto contributed $30,000 to qualified charitable organizations during 2013, the maximum amount it can deduct as a charitable contribution is $29,000 ($28,000 + $1,000, which is the carryover amount from 2012 since the maximum carryover is limited to 5 years). Therefore, the correct answer is C.

Pluto Corporation Contributes $30,000 to Qualified Charitable Organizations During 2013