Stewart had adjusted gross income of $24,000 in 2014. During the year, he made the following contributions to qualified charities:
$8,000 cash

1,000 shares of Able Corporation common stock, acquired in 1979 (cost and fair market value of $7,000)

Considering the charitable contribution deduction limitation, what amount can Stewart claim as a deduction for charitable contributions in 2014?

Question

Stewart had adjusted gross income of $24,000 in 2014. During the year, he made the following contributions to qualified charities: ​
$8,000 cash
​
1,000 shares of Able Corporation common stock, acquired in 1979 (cost and fair market value of $7,000)
​
Considering the charitable contribution deduction limitation, what amount can Stewart claim as a deduction for charitable contributions in 2014?

Quizplus · Accepted Answer

Stewart's deduction for cash contributions is limited to 50% of his adjusted gross income, or $12,000. However, his deduction for the donation of the Able Corporation stock is limited to 30% of his adjusted gross income, or $7,200. Therefore, the total charitable contribution deduction that Stewart can claim on his tax return is limited to the lesser of these two amounts, which is $7,200. Therefore, the correct answer is C) $12,000.

Stewart Had Adjusted Gross Income of $24,000 in 2014