ParentCo's separate taxable income was $200,000,and SubCo's was $50,000.Consolidated taxable income before contributions was $125,000.Charitable contributions made by the affiliated group included $60,000 by ParentCo and $30,000 by SubCo.Compute the group's maximum charitable contribution deduction.

Question

Quizplus · Accepted Answer

The maximum charitable contribution deduction for a consolidated group is limited to 10% of the consolidated taxable income before contributions. Here, the consolidated taxable income before contributions is $125,000, so the maximum deduction is 10% of $125,000, which is $12,500.

ParentCo's Separate Taxable Income Was $200,000,and SubCo's Was $50,000