Linda, an accountant with AGI of $80,000, made the following donations: - $2,000

Question

Linda, an accountant with AGI of $80,000, made the following donations:
- $2,000 to the Presbyterian Church
- $50 cash to her sister who lost her job
- $1,000 cash to the Democratic political party
- Used clothing to the Salvation Army. Linda's original cost for the clothing was $5,000 and the clothes were worth $300 at the time of the donation

Calculate Linda's maximum allowable charitable contribution.

- $3,650

- $2,300

- $2,350

- $8,050

Allison (29 years old) incurred the following expenses this year:

State income taxes          $4,000

State sales taxes               $3,000

Property taxes on her car      $500

Unreimbursed medical expenses $2,500

Cash Charitable Contribution   $1,000

If Allison's AGI is $50,000, calculate the most itemized deductions that she can legally claim.

$4,500

$5,000

$5,500

$8,000

$8,500

- $3,650

- $2,300

- $2,350

- $8,050

Allison (29 years old) incurred the following expenses this year:

State income taxes          $4,000

State sales taxes               $3,000

Property taxes on her car      $500

Unreimbursed medical expenses $2,500

Cash Charitable Contribution   $1,000

If Allison's AGI is $50,000, calculate the most itemized deductions that she can legally claim.

$4,500

$5,000

$5,500

$8,000

$8,500

Explanation / Answer

Answer

1. B

Maximum allowable charitable contribution:

=$2,000 + $300

=$2300

Charitable contributions must be made to a QUALIFIED organization.

Cash to her sister does not count as a qualified charitable organization and therefore can't be include.

According to the IRS: You can't deduct contributions made to a political candidate, a campaign committee, or a newsletter fund.

2. E $8500

The most itemized deductions that she can legally claim:

State income taxes          $4,000

State sales taxes                     $3,000

Property taxes on her car           $500

Cash Charitable Contribution      $1,000

Total itemized deductions        =$8500

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