[Zizoty]

I’m still confuse on when to use the 30% or 50% for charitable contribution. I know that if one contribute property, then the limit is 30%. The overall contribution is 50% if one contribute cash and property?

AUD - 83 Feb11
REG - 75 May11
BEC - 73 July11 84 Oct11
FAR - 63 Aug11 76 Feb12 I'M DONE!!!!!

[kb24]

You're right. Individual can deduct up to 50% of AGI in charitable contributions. The amount that is made up of property is limited to a total of 30% of AGI. So you could deduct 20% cash and 30% property or any other combination where total is less or equal to 50% and property is less than or equal to 50%.

FAR 4/1/11 - 89
AUD 4/15/11 - 85
REG 4/29/11 - 80
BEC 5/13/11 - 85

[32CPA]

This is the way I remembered it… I wrote this over and over until it stuck.

This is for appreciated LTCG Property and appreciated STCG property:

LTCG = FMV 30%

STCG = Basis 50%

Just make that association and you'll be fine. Look at it this way… a long term gain, would have a significant difference between basis and FMV (bought a stock for $5 in 1970 now worth $5,000). So the gov't would love to limit how much you get to deduct for that. For STCG, the appreciation is typically much smaller (bought a stock for $5 in January and donated at 10/31 with FMV of $10)… so the Gov't allows you to use your basis and 50% limitation.

The jist of this is… which will benefit the Gov't and not you the most. That's kind of the general rule for all taxes.

BEC - Pass 10/2010
FAR - Pass 10/2010
AUD - Pass 11/2010
REG - Pass 05/2011

[32CPA]

Most questions that test this theory will relate to stock donations (intangibles). Which are the LTCG = FMV 30% and STCG = Basis 50%.

Most other contributions are 50% limitations.

Also, you can elect to forgo the cap gain and use 50%, but its unlikely they'll test you on that. And you most likely will not be tested to know if a contribution is 20% or not. Just know the theory.

BEC - Pass 10/2010
FAR - Pass 10/2010
AUD - Pass 11/2010
REG - Pass 05/2011

[Zizoty]

thank you

AUD - 83 Feb11
REG - 75 May11
BEC - 73 July11 84 Oct11
FAR - 63 Aug11 76 Feb12 I'M DONE!!!!!

[Author]

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