Final answer:
Penelope's charitable contribution deduction for 2020 should be the sum of the fair market values of the donated items, which is $33,600. This includes $3,600 for inventory, $20,000 for stock, and $10,000 for a comic book collection, all donated to qualified charitable organizations and immediately sold for these values.
Step-by-step explanation:
To calculate Penelope's charitable contribution deduction for 2020, you need to consider the basis and fair market value (FMV) of the items donated along with the tax rules that apply to donating property to qualified charitable organizations. The deductible amount for each item is generally the lower of the basis or the FMV. Penelope donated three items with the following values: inventory with a basis of $4,000 and FMV of $3,600; stock with a basis of $8,000 and FMV of $20,000; and a comic book collection with a basis of $2,000 and FMV of $10,000.
For the inventory, which was held for resale in a business, the deduction is limited to the inventory's basis, since its FMV is less than the basis. Therefore, Penelope can deduct $3,600 for the inventory. For the stock in Sparrow, Inc., held as an investment, she can deduct the FMV, because it is a long-term capital gain property (held for more than one year) donated to a public charity, which allows her to deduct the higher amount without paying capital gains tax. So, the deduction for the stock is $20,000. Lastly, for the comic book collection, which is also a long-term capital gain property, the deduction is the FMV of $10,000 since it was donated to a public charity.
The total charitable contribution deduction for 2020 is therefore the sum of these amounts: $3,600 (inventory) + $20,000 (stock) + $10,000 (comic book collection) = $33,600. Therefore, the correct answer is (e) $33,600.