I don't get this, how is matching not a fringe benefit?
Tapper Corp., an accrual-basis, calendar-year corporation, was organized on January 2, 2014. During 2014, revenue was exclusively from sales proceeds and interest income. The following information pertains to Tapper:
Taxable income before charitable contributions for the year ended December 31, 2014
$500,000
Tapper’s matching contribution to employee-designated qualified universities made during 2014
10,000
Board of directors’ authorized contribution to a qualified charity (authorized December 1, 2014; made February 1, 2015)
30,000
What is the maximum allowable deduction that Tapper may take as a charitable contribution on its tax return for the year ended December 31, 2014?
A. $10,000
B. $40,000
Answer (B) is correct.
The total amount of charitable contributions is limited to 10% of a corporation’s adjusted taxable income. Tapper is limited to a $50,000 ($500,000 × 10%) deduction. Contributions to qualifying charities are deductible in the year paid. In addition, an accrual-method corporation may deduct a contribution authorized by the board of directors during the current tax year and paid no later than 2 1/2 months after the close of the tax year. Tapper has qualifying contributions totaling $40,000, which is under the 10% limit of $50,000, so Tapper may fully deduct its qualifying contributions in 2014.
C. $30,000
D. $0
.