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salantis [7]
3 years ago
8

Richard donates publicly traded Gold Company stock with a basis of $1,000 and a fair market value of $15,000 to the college he a

ttended, which is considered a public charity. Richard has owned the shares for 10 years.
1. How is this contribution treated on Richard's tax return?
2. Assuming his adjusted gross income is at least $50,000, Richard can to deduct $_____on his Schedule A.
3. However, Richard may elect to use the 50 percent AGI limitation and deduct $_______.
Business
1 answer:
Rufina [12.5K]3 years ago
7 0

Answer:

1. How is this contribution treated on Richard's tax return?

Richard can deduct this donation as a qualified contribution to a charity.

2. Assuming his adjusted gross income is at least $50,000, Richard can deduct <u>$15,000</u> on his Schedule A.

Qualified contribution deductions of long term capital gains are limited to 30% of AGI, and in this case, Richard can deduct the full amount.

3. However, Richard may elect to use the 50 percent AGI limitation and deduct <u>$1,000</u>.

Richard can elect to deduct only the basis of the stock, but who likes to pay more taxes?

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