Question

Ray Ray made the following contributions this year. Charity Property Cost FMV Athens Academy School Cash $ 9,800 $ 9,800 United Way Cash 8,800 8,800 American Heart Association Antique painting 18,050 90,250 First Methodist Church Coca-Cola stock 16,400 24,600 Determine the maximum amount of charitable deduction for each of these contributions ignoring the AGI ceiling on charitable contributions and assuming that the American Heart Association plans to sell the antique painting to fund its operations. Ray Ray has owned the painting and Coca-Cola stock since 1990.

Answer 1

The maximum amount of charitable deduction for each contribution is determined by the fair market value (FMV) of the property. The deductions are $9,800 for Athens Academy School Cash, $8,800 for United Way Cash, $90,250 for the American Heart Association antique painting, and $24,600 for First Methodist Church Coca-Cola stock.

Step-by-step explanation:

The maximum amount of charitable deduction for each of these contributions can be determined by considering the Fair Market Value (FMV) of the contributed property and the type of property.

1. Athens Academy School Cash: The maximum deduction would be $9,800, as the FMV and the cost are the same.
2. United Way Cash: The maximum deduction would also be $8,800, as the FMV and the cost are the same.
3. American Heart Association Antique painting: The maximum deduction would be the FMV of the painting, which is $90,250.
4. First Methodist Church Coca-Cola stock: The maximum deduction would be the FMV of the stock, which is $24,600.

Keep in mind that this calculation is done assuming the American Heart Association plans to sell the antique painting to fund its operations.

Answer 2

The maximum amount is $9.000 for the cash contributions and $35.000 for the property donations. Because Ray has reasons to expect that The American Heart Association will sell the antique painting, the antique is used for a purpose unrelated to The American Heart Association's charitable purpose, Ray's deduction for the painting is limited to his basis in the painting $15.000. The amount for the deduction for The Coca Cola stock is $20.000 because is stock is considered intangable appreciated gain property.