Question

Remsco has taxable income of $80,000 and a charitable contribution limit modified taxable income of $82,000. Its charitable contributions for the year were $8,300. What is Remsco's current-year charitable contribution deduction and contribution carryover?

a) $8,300 current-year deduction; $0 carryover.
b) $8,000 current-year deduction; $300 carryover.
c) $8,200 current-year deduction; $100 carryover.
d) $200 current-year deduction; $8100 carryover.

Answer 1

Remsco's current-year charitable contribution deduction is $8,300 and its contribution carryover is $0.

Step-by-step explanation:

Remsco's current-year charitable contribution deduction is $8,300 and its contribution carryover is $0.

In order to determine the current-year charitable contribution deduction, we need to compare Remsco's taxable income with its charitable contribution limit modified taxable income. Since the taxable income of $80,000 is less than the charitable contribution limit modified taxable income of $82,000, Remsco can deduct the full amount of its charitable contributions for the year, which is $8,300.

However, Remsco does not have any contribution carryover because its current-year charitable contribution deduction is equal to or less than its taxable income.