In 2018, Gray Corporation, a calendar year C corporation, has a$75,000 charitable contribution carryover...

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Accounting

In 2018, Gray Corporation, a calendar year C corporation, has a$75,000 charitable contribution carryover from a gift made in 2013.Gray is contemplating a gift of land to a qualified charity ineither 2018 or 2019. Gray purchased the land as an investment fiveyears ago for $100,000 (current fair market value is $250,000).Before considering any charitable deduction, Gray projects taxableincome of $1,000,000 for 2018 and $1,200,000 for 2019.
Should Gray make the gift of the land to charity in 2018 or in2019?
If an amount is zero, enter "0".
a. If Gray makes the gift of the land tocharity in 2018:
The amount of the deduction would be $ and thecorporation is able to use $ of the $75,000carryover. Therefore, Gray has a $ carryover to2019, of which $ would be used in 2019,leaving
$ to be carried over to 2020.
b. If Gray waits and makes the gift of the landto charity in 2019:
The corporation would have $ carryover from 2013and $ carryover from 2018. In 2019, the amount ofthe deduction would be $ and the excess of$ would carryover to 2020.
c. Therefore, Gray should make the gift of theland to charity in ????.

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3.8 Ratings (646 Votes)

Gray Corporation should defer the gift of the land until 2019 This would allow Gray to fully deduct in 2018 the carryover contribution amount of 75000 If instead Gray gifted the land in 2018 the corporation would lose any otherwise allowable deduction as to the 75000 carryover amount This occurs because current year gifts are applied against the taxable income limitation before application of any carryover See Answer

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In: AccountingIn 2018, Gray Corporation, a calendar year C corporation, has a$75,000 charitable contribution carryover from...In 2018, Gray Corporation, a calendar year C corporation, has a$75,000 charitable contribution carryover from a gift made in 2013.Gray is contemplating a gift of land to a qualified charity ineither 2018 or 2019. Gray purchased the land as an investment fiveyears ago for $100,000 (current fair market value is $250,000).Before considering any charitable deduction, Gray projects taxableincome of $1,000,000 for 2018 and $1,200,000 for 2019.Should Gray make the gift of the land to charity in 2018 or in2019?If an amount is zero, enter "0".a. If Gray makes the gift of the land tocharity in 2018:The amount of the deduction would be $ and thecorporation is able to use $ of the $75,000carryover. Therefore, Gray has a $ carryover to2019, of which $ would be used in 2019,leaving$ to be carried over to 2020.b. If Gray waits and makes the gift of the landto charity in 2019:The corporation would have $ carryover from 2013and $ carryover from 2018. In 2019, the amount ofthe deduction would be $ and the excess of$ would carryover to 2020.c. Therefore, Gray should make the gift of theland to charity in ????.