Pluto Corporation contributes $30,000 to qualified charitable organizations during 2018. Pluto's 2018 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 $2,000 from 2017. What is the maximum amount Pluto Corporation can deduct as a charitable contribution for 2018?
A)$- 0 -
B)$28,000
C)$29,000
D)$30,000
E)$35,000

Question

Quizplus · Accepted Answer

Charitable contribution deductions for corporations are limited to 10% of their taxable income before the charitable contribution deduction, minus the dividend-received deduction. In this case, Pluto's limit would be $280,000 x 10% = $28,000, minus the $10,000 dividend-received deduction, which gives us $18,000. However, Pluto also has a carryover charitable contribution of $2,000 from 2017, which brings the maximum deduction for 2018 up to $29,000 ($18,000 + $2,000 + $30,000). Therefore, option C is the correct answer.

Pluto Corporation Contributes $30,000 to Qualified Charitable Organizations During 2018