Question

The deduction to individual taxpayers for charitable contributions paid in cash made to public charities is limited to ten percent of the taxpayer's AGI whereas casualty losses on personal assets are only deductible to the extent the losses exceed ten percent of the taxpayer's AGI. What is the limit for deducting charitable contributions made in cash to public charities?

1) 10% of AGI
2) 20% of AGI
3) 30% of AGI
4) 40% of AGI

Answer 1

The deduction limit for charitable contributions made in cash by an individual taxpayer to public charities is 10% of their AGI.

Step-by-step explanation:

The limit for deducting charitable contributions made in cash to public charities is 10% of the taxpayer's Adjusted Gross Income (AGI). This means that an individual taxpayer can claim a deduction on their federal income tax return for the amount of cash donations made to qualifying public charities, but the total deduction amount cannot exceed 10% of their AGI.

This limit serves as a cap, ensuring that benefits from charitable contributions do not disproportionately offset the taxpayer's income.