Question

Arnold, a single individual, has adjusted gross income of $65,000 in the current year. Arnold donates the following items to his favorite qualified charities:

1. ABC stock acquired six years ago at a cost of $6,000. FMV at date of contribution was $40,000.
2. Personal clothing items purchased two years ago at a cost of $1,000. FMV at the date of contribution was $400. What is the amount of his charitable contribution for the current year?
A. 15,400
B. 23,000
C. 19,300
D. 18,800

Answer 1

Option A. $15,400

Step-by-step explanation:

The net deduction allowed as an charitable contributions are as under:

$

1. ABC Cop. stock

Cost $6000

FMV $22000 $16000

2. Personal Clothing Items

Cost $1000

FMV $400 ($600)

Net Deduction $15,400

The amount that qualifies as charitable contribution for the year is $15400.