Heron Corporation, a calendar year C corporation, had an excess charitable contribution for 2017 of $5,000. In 2018, Heron made a further charitable contribution of $20,000. Heron's 2018 deduction is limited to $15,000 (10% of taxable income). The 2018 contribution must be applied first against the $15,000 limitation.

Question

Quizplus · Accepted Answer

This is true as per the rules for excess charitable contributions. Any excess contribution from the previous year should be deducted first before applying the current year's contribution to the limitation. Therefore, the 2018 contribution will be reduced to $5,000 (i.e., $20,000 - $15,000), and the remaining $5,000 will carry forward to the next tax year.

Heron Corporation, a Calendar Year C Corporation, Had an Excess