In 2005, Victor acquires an Andy Warhol painting for $32,000. During the current year he donates the painting to the city museum. Its fair market value at the date of the contribution is $38,000. If Victor's adjusted gross income is $66,000 and he elects to reduce the contribution to its basis, his deductible contribution is

Question

Quizplus · Accepted Answer

Since Victor elects to reduce the contribution to its basis, his deductible contribution is equal to the basis of the painting, which is $32,000 (the amount he acquired it for). Therefore, choice C is the correct answer. The fair market value of the painting is irrelevant in this situation, as Victor chose to use the basis method.

In 2005, Victor Acquires an Andy Warhol Painting for $32,000