Question

Remsco has taxable income of $73,000 and a charitable contribution limit modified taxable income of $78,500. Its charitable contributions for the year were $8,020. What is Remsco's current-year charitable contribution deduction and contribution carryover (assuming Remsco does not elect to use the 25% of modified taxable income to determine its charitable contribution deduction)

Answer 1

$7,850 and $170

Step-by-step explanation:

The computation of the Remsco's current-year charitable contribution deduction and contribution carryover is given below:

The deduction is limited to 10% of the modified taxable income i.e.

= $78,500 × 10%

= $7,850

And, the carryover amount is

= $8,020 - $7,850

= $170