a. Frank, who has AGI of $96,500, owns stock in Schultz Corporation with a basis

Question

a. Frank, who has AGI of $96,500, owns stock in Schultz Corporation with a basis of $32,500.He donates the stock to a qualified charitable organization on December 11, 2017. What is the amount of Frank’ charitable contribution deduction on his 2017 Schedule A, assuming that he purchases the stock on May 30, 2017, and the stock had a fair market value of $34,275 when he made the donation, and assuming that he makes no charitable contribution elections? Keep in mind AGI limits.

b. Assume the same facts as in a., except that Frank purchased the stock on May 30, 2010. What is the amount of Frank’ charitable contribution deduction reported on his 2017 Schedule A, assuming he makes no charitable contribution elections? Keep in mind AGI limits.

Explanation / Answer

a) Limits on charitable deductions

If cost is sold on same year of purchase deduction available is as per purchase price and not fair value but You can deduct appreciated capital gains assets up to 20% of AGI so deduction available is 96500*20% = $19,300

b) The amount deductable is same only change is for deducation we should have considered fair market value instead of purchase price

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