Question

Stewart had adjusted gross income of $24,000 in 2014. During the year, he made the following contributions to qualified charities:​1) $8,000 cash2) 1,000 shares of Able Corporation common stock, acquired in 1979 (cost and fair market value of $7,000)​Considering the charitable contribution deduction limitation, what amount can Stewart claim as a deduction for charitable contributions in 2014?a. $7,200b. $8,000c. $12,000d. $15,000e. None of the above

Answer 1

Answer:

c. $12,000

Explanation:

Contributions will be limited to 50% of adjusted gross income. Adjusted gross income of stewart is $24,000. 50% of it is $12,000. Total contributions made during the year is cash contributions of $8,000 and stock having a fair market value of $7,000. Totalling to $15,000. But allowed during the year is only $12,000. Hence the answer is c $12,000.