Q: What mistakes do candidates make on this CPA question?

Applying the 30% limit to cash or assuming the 50% overall limit blocks the deduction (it doesn't here).

Question 1

A taxpayer (AGI 0,000) donated cash of ,000 to a public charity and long-term capital gain stock (FMV ,000, Basis ,000) to a public charity. What is the maximum charitable contribution deduction allowed in the current year?

Accepted Answer

Check limits: Cash = 60% AGI. LTCG Property = 30% AGI. Total = Generally 50% AGI (can go to 60% with cash). Here, 30k + 15k = 45k. AGI is 100k. 45k < 50k. All deductible.

Question 2

What mistakes do candidates make on this CPA question?

Accepted Answer

Applying the 30% limit to cash or assuming the 50% overall limit blocks the deduction (it doesn't here).

A taxpayer (AGI 0,000) donated cash of ,000 to a public charity and long-term capital gain stock (FMV ,000, Basis ,000) to a public charity. What is the maximum charitable contribution deduction allowed in the current year?

How to approach this question

Full Answer

Common mistakes

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