Curly donated inventory (ordinary income property) to a university. He purchased the inventory seven months ago for $10,000, and

Question

3 years ago

11

Curly donated inventory (ordinary income property) to a university. He purchased the inventory seven months ago for $10,000, and

on the date of the gift, it had a fair market value of $2,000. What is his maximum charitable contribution deduction for this donation if his AGI is $80,000?

Business

1 answer:

Fudgin [204] · Answer 1 · 2022-03-17T10:23:26+03:00

Answer:

The answer is: $2,000

Explanation:

The IRS allows charitable deductions for ordinary income property to a maximum of 50% of adjusted gross income (AGI). The goods donated should be recorded at the lesser value between basis cost or fair market value. In this case Curly can deduct up to $40,000 per year, if he donates something that is worth that amount.