Someone asked a while back about charitable contributions and I mentioned 50% of AGI..well here is the question:
Moore, a single taxpayer, had $50,000 in adjusted gross income for 2014. During 2014, she contributed $18,000 to her church. She had a $10,000 charitable contribution carryover from her 2013 church contribution. What was the maximum amount of properly substantiated charitable contributions that Moore could claim as an itemized deduction for 2014?
A.
$10,000
B.
$18,000
Correct C.
$25,000
D.
$28,000
It is 50% of AGI as churches are considered “50% organizations” See below for the rest of the explanation:
There is a ceiling on the amount an individual may deduct each year as a charitable contribution based both on the type of property contributed and the type of charity to which the contribution is made.
The ceilings are as follows (based on adjusted gross income (AGI)):
“50% charities” (where charitable contributions are limited to 50% of an individual's AGI) include churches (or church conventions or associations); tax-exempt educational organizations; tax-exempt hospitals and certain medical research organizations; certain organizations holding property for state and local colleges and universities; certain governmental units and subdivisions; certain exempt religious, charitable, scientific, literary, or educational organizations. (IRC Section 170(b)(1)(A))
“30% charities” are qualifying charitable organizations that are not “50% charities” such as war veterans organizations, fraternal orders, cemetery companies, and certain private nonoperating foundations. (Regulation Section 1.170A-8; IRC Section 170(b)(1)(B))
30% ceiling generally applies to gifts of appreciated long-term capital gain property to a 50% charity.
20% ceiling applies to gifts of appreciated long-term capital gain property to a 30% charity.
If an individual's charitable gifts for a tax year exceed the percentage ceilings for the year, the excess may be carried forward and deducted for up to five years (subject to the later year's ceiling). (IRC Section 170(d)(1))
CPA, CFE
CISA- Experience will be completed by August 2016
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