Robert and Becky husband and wife)are both lawyers and they contribute money to various organizations each year.They file a joint return and their adjusted gross income for 2016 is $100,000.They contributed to the following organizations in 2016:
• $5,000 to Alta Sierra country club
• $10,000 to prevent cruelty to animals
• $2,000 to State Bar Association Political Action Committee
• $12,000 to cancer research foundation
• Donated clothing to Salvation Army.Robert originally purchased the items for $400,but the fair market value of the same items at a thrift store is equal to $50.)
How much can Robert and Becky deduct as charitable contributions for the year 2016?

Question

Quizplus · Accepted Answer

The deduction for charitable contributions is limited to 50% of adjusted gross income.

1. Alta Sierra Country Club: This is not a charitable organization, so it cannot be deducted.

2. Prevent Cruelty to Animals: This is a charitable organization, deductible up to 50% of adjusted gross income. Therefore, the deduction is $10,000.

3. State Bar Association Political Action Committee: This is not a charitable organization, so it cannot be deducted.

4. Cancer Research Foundation: This is a charitable organization, deductible up to 50% of adjusted gross income. Therefore, the deduction is $12,000.

5. Donation of clothing to Salvation Army: The donation is limited to the fair market value of $50, even though Robert originally spent $400. Therefore, the deduction is $50.

Total deductions: $10,000 + $12,000 + $50 = $22,050, which is less than 50% of their adjusted gross income of $100,000. Therefore, the correct answer is C.

Robert and Becky Husband and Wife)are Both Lawyers and They