Question

Madeoff donated stock (capital gain property) to a public charity. He purchased the stock 3 years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000. What is his maximum charitable contribution deduction for the year if his AGI is $500,000 (before considering the itemized deduction phase-out)?

A. $100,000.

B. $200,000.

C. $150,000.

D. $250,000.

E. None of these.

Answer 1

Madeoff's maximum charitable contribution deduction for the year is $150,000. Option C.

Step-by-step explanation:

When donating capital gain property, the maximum charitable contribution deduction is based on the fair market value of the property. In this case, Madeoff donated stock with a fair market value of $200,000.

However, the deduction is limited to a certain percentage of the taxpayer's adjusted gross income (AGI). The specific percentage depends on the type of organization receiving the donation and the type of property donated.

In this scenario, Madeoff's maximum charitable contribution deduction would be $150,000. This is because the deduction is limited to 30% of his AGI, which is $500,000. Therefore, 30% of $500,000 is $150,000, which is the maximum deduction he can claim. So Option C.