Ray Ray made the following contributions this year. Determine the maximum amount

Question

Ray Ray made the following contributions this year.

Determine the maximum amount of charitable deduction for each of these contributions ignoring the AGI ceiling on charitable contributions and assuming that the American Heart Association plans to sell the antique painting to fund its operations. Ray Ray has owned the painting and Coca-Cola stock since 1990.

Charity Property Cost FMV Athens Academy School Cash $ 7,450 $ 7,450 United Way Cash 6,700 6,700 American Heart Association Antique painting 19,350 96,750 First Methodist Church Coca-Cola stock 13,250 19,875

Explanation / Answer

Determination of the maximum amount of charitable deduction:

The maximum amount is $14,150 for the cash contributions and $39,225 for the property donations. Because Ray Ray has reason to expect that the American Heart Association will sell the antique painting, the antique is used for a purpose unrelated to the American Heart Association’s charitable purpose. Thus, Ray Ray’s deduction for the painting is limited to his basis in the painting ($19,350). The amount of the deduction for the Coca Cola stock is its fair market value ($19,875) because the stock is considered intangible, appreciated capital gain property.

Charity Deduction Athens Academy School $7,450 United Way $6,700 Total Cash contribution $14,150 American Heart Association $19,350 First Methodist Church $19,875 Total Property donation $39,225 Maximum amount of charitable deduction 53,375

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