Question

Which of the following statements is INCORRECT regarding charitable donations of capital gain property?

a) Deduction for appreciated property is based on fair market value.
b) Deduction for appreciated property is limited to cost basis.
c) Limitation applies to certain types of charitable organizations.
d) Certain forms are required for donating appreciated property.

Answer 1

The correct statement is that the deduction for appreciated property is based on fair market value, not limited to the cost basis.

Step-by-step explanation:

The correct statement regarding charitable donations of capital gain property is:

The deduction for appreciated property is based on its fair market value, not limited to the cost basis. This means that if the property has appreciated in value since its original purchase, the donor can deduct the current fair market value of the property as a charitable contribution.